While the Cryptocurrency Mining Is Decreasing, Nvidia Sees a Thriving Future
FactSet recently posted the poll results of a group of analysts regarding how Nvidia may react during these scarce times for crypto mining. Recently, mining efforts seem to be “waning,” but that is had no negative impact on the way Nvidia plans to excel. Based on the information, it seems that they will actually be seeing a demand for their gaming services and data centers.
That is not to say that Nvidia will see no decline. Like the rest of the crypto world, Nvidia is expected to have a small drop in revenue without the same performance of their crypto hardware. However, they are expected to easily make this up with gaming and server sales. In fact, their projections show an expected growth of 47%, which would their revenue to $1.75 billion yearly, for gaming alone. The data center revenue should boost by 78%, which is approximately $740 million.
One analyst at Evercore named CJ Muse agrees with these other experts, believing in the company as “an area of strength, particularly when considering additional benefit of a new gaming cycle favoring Nvidia.” He continued on, saying,
“We believe concerns around a likely falloff from cryptocurrency-driven Ethereum GPU mining strength are largely exaggerated, and Nvidia will likely power through any tough compares from cryptocurrency-driven tailwinds.”
Based on the sale of processor sales, Nvidia submitted a report in May that this product resulted in $289 million in revenue. In cryptocurrency, the first quarter of Nvidia’s fiscal year indicated that this sector represented approximately 9% of the total profits made, which was about $3.2 billion. Previously, 76% of the OEM revenue came from chips for crypto mining, which is an increase of 115% since the last quarter. Unfortunately, experts from Nvidia do not see this progress lasting, saying that their crypto market sales will probably see a drop of around 66% within the second quarter.
Nvidia has grown quite precise about their predictions. Back in July, they were proven right again when their GPUs declined in price. Advanced Micro Devices (AMD), the main competition of Nvidia, provided reports that their company’s interaction with blockchain or mining was about 10% of the total profit they would make. However, CEO Lisa Su held a different sentiment, calling blockchain technology “a bit of a distraction in the short term.”
Even with the falling prices, manufacturers are far from discouraged in developing new hardware for companies. In fact, ASUS released an announcement in May to demonstrate their intention to release a cryptocurrency motherboard, which North American consumers can purchase in 2018’s third quarter.