Nvidia Falls 5% as Demand for Crypto-Related Chips Dries Up

Remigio Civitarese
Agosto 18, 2018

That was a financial windfall for Nvidia and AMD, the leading makers of consumer graphics cards.

The company's bleak outlook for cryptocurrency chips was a sharp reversal from the prior fiscal quarter, when sales to so-called miners of digital currencies such as bitcoin and ethereum amounted to $289 million, almost a 10th of Nvidia's revenue.

However, Nvidia's CEO, Jensen Huang, added that executives don't think cryptocurrency will be material to the company for the second half of the fiscal year. On Thursday it reported actual revenue of only $18 million. The firm now expects revenue to drop to anywhere between of $3.19 billion to $3.32 billion, averaged out at $3.25 billion, compared to analysts that estimated $3.34 billion for the third-quarter.

The diluted earning per share for this quarter were at $1.17, up by 91 percent compared to the a year ago and down 11 percent compared to the previous quarter.

But since then, the whole cryptocurrency market has largely tanked.

Analysts were troubled by Nvidia's gross margin forecast of 62.8 percent, slightly below expectations of 62.9 percent and possibly a result of putting more memory modules on its chips. Nvidia said sales of crypto-specific products totaled. Turing, as it's called, will also make its way into gamer- and data-center chips.

Ramsay wrote, "While we do not expect a formal announcement regarding the timing of NVIDIA's next generation Turing gaming GPU launch, we believe NVIDIA has likely been aggressive in the gaming channel ahead of its launch". This pattern was also observed across the board, with revenue beating analysts' prediction across markets of data centers, visualization, and auto-related revenue.

Out of the 32 analysts polled in the past 12 months, 22 rate Nvidia stock a Buy, 9 rate the stock a Hold and 1 recommends a Sell. Earnings reached $1.76 per share, an increase of 91 per cent from previous year, higher than estimates of $1.66 per share.

The Santa Clara, Calif. -based company delivered a Q2 net income of $1.1 billion, or $1.76 per share.

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