Graphics card big Nvidia CFO Colette Kress says the corporate has been unable to estimate diminished crypto mining demand impacted its Q2 outcomes, which fell in need of analyst expectations on Wednesday.
The chip big released its monetary outcomes for the three months ended July 31, which revealed a 19% quarter-on-quarter drop in income to $6.5 billion, whereas web earnings fell 59% to $656 million.
Income for its gaming division, which incorporates gross sales of its high-end GPUs, fell 44% in income from the earlier quarter to $2.04 billion, which Nvidia attributed to “difficult market circumstances.”
Kress, who additionally serves as government vice chairman of the corporate, mentioned Nvidia has restricted visibility on how the crypto market impacts the demand for his or her gaming merchandise:
“Our GPUs are able to cryptocurrency mining, although now we have restricted visibility into how a lot this impacts our total GPU demand.”
“We’re unable to precisely quantify the extent to which diminished cryptocurrency mining contributed to the decline in Gaming demand,” she added.
Whereas the chip big’s graphic processing items (GPUs) had been designed for gaming functions, excessive demand for crypto mining actions over the previous few years has contributed to a 320% improve within the firm’s share value over the past 5 years.
Kress mentioned, nonetheless, that falling crypto costs and adjustments in consensus mechanism have previously impacted demand for its merchandise and the power to estimate it:
“Volatility within the cryptocurrency market – akin to declines in cryptocurrency costs or adjustments in methodology of verifying transactions, together with proof of labor or proof of stake — has previously impacted, and might sooner or later impression, demand for our merchandise and our skill to precisely estimate it.”
With the Ethereum Merge scheduled for Sept. 15, the community’s consensus change to proof-of-stake may additional drive down the demand for crypto mining {hardware}. This might spell bother for cryptocurrency mining merchandise akin to Nvidia’s CMP170 HX, which presently costs round $4,695.
Associated: Nvidia to pay $5.5M as part of SEC case concerning ‘inadequate disclosures’ around crypto mining
That being mentioned, cryptocurrencies akin to Bitcoin (BTC), Litecoin (LTC), Monero (XMR) and Dogecoin (DOGE) are among the many networks nonetheless working on proof-of-work consensus mechanisms with no observable plans to transition sooner or later.
Nvidia’s share price has additionally dropped 5.89% over the past 5 days on the Nasdaq.
