Nvidia Suffers in Q4 for Earnings, But Crypto Winter Is Surprisingly Not the One to Blame
Nvidia is a major tech company that is responsible for making multiple types of computer chips, but one of their biggest products for the crypto world is created for mining. Cryptocurrency has steadied its downward fall in value, but the entire industry still is a bear market for now.
Though Nvidia has been consistent in crediting the hardships of the cryptocurrency market for its suffering, it seems that the crypto winter cannot be blamed this time for the $500 million that Nvidia came in below their original estimates for Q4 fiscal 2019 earnings.
Instead, the gaming and data centers are the reason that, instead of reaching $2.7 billion in revenue, they only reached $2.2 billion. Jensen Huang, the CEO and founder of Nvidia, said,
“Deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs.”
Huang added, “Q4 was an extraordinary, unusually turbulent, and disappointing quarter. Looking forward, we are confident in our strategies and growth drivers. The foundation of our business is strong and more evident than ever – the accelerated computing model NVIDIA pioneered is the best path forward to serve the world’s insatiable computing needs. The markets we are creating – gaming, design, HPC, AI and autonomous vehicles – are important, growing and will be very large. We have excellent strategic positions in all of them.”
Based on the crypto winter, Nvidia had previously decided to pull back on their development of processor chips for crypto mining, choosing to turn their attention towards AI and robotics instead. However, when a new bull run starts, there is no telling if Nvidia will suddenly have interest in crypto again.
The chipmaker will still have their hands full in the crypto industry for some time, considering a class action lawsuit that they are a part of right now. The lawsuit accuses Nvidia of misleading the public about the way that the lack of crypto mining will affect the future revenue that they bring in.
Still, it seems that Nvidia is hoping significantly that they are correct about gaming having a greater opportunity than crypto. With their shares down by 20% today, hopefully the rest of the public gets behind their gaming focus, though crypto users could ultimately be left in the dust.