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Nvidia cites limited visibility into impact of crypto mining on Q2 results

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Nvidia cites limited visibility into impact of crypto mining on Q2 results

Graphics card giant Nvidia’s chief financial officer, Colette Kress, said the company was unable to estimate that reduced demand for crypto mining had an impact on its second-quarter results, which fell short of analysts’ expectations on Wednesday.

The flea giant published its financial results for the three months ended July 31, which showed a 19% drop in quarter-over-quarter revenue to $6.5 billion, while net profit fell 59% to 656 millions of dollars.

Revenue from its gaming division, which includes sales of its high-end GPUs, fell 44% from the previous quarter to $2.04 billion, which Nvidia attributed to “challenging market conditions.” .

Kress, who is also the company’s executive vice president, said Nvidia has limited visibility into how the crypto market is affecting demand for their gaming products:

“Our GPUs are capable of mining cryptocurrencies, although we have limited visibility into the impact of this on our overall GPU demand.”

“We are unable to quantify precisely to what extent the reduction in cryptocurrency mining has contributed to the decline in demand for games,” she added.

While the chip giant’s graphics processing units (GPUs) were designed for gaming purposes, strong demand for crypto-mining activity in recent years has contributed to a 320% rise in the price of the chip. action of the company over the past five years.

Kress said, however, that falling crypto prices and changes in the consensus mechanism have in the past impacted demand for his products and the ability to estimate it:

“Cryptocurrency market volatility – such as declining cryptocurrency prices or changes in transaction verification methods, including proof-of-work or proof-of-stake – has in the past had and may have in the future an impact on demand for our products and our ability to estimate it accurately.

With the Ethereum merger scheduled for September 15, the consensus change of the network to proof-of-stake could further lower the demand for crypto mining hardware. This could cause problems for cryptocurrency mining products such as Nvidia’s CMP170 HX, which currently costs approximately $4,695.

Related: Nvidia to pay $5.5 million in SEC case over ‘inadequate disclosures’ of cryptocurrency mining

That being said, cryptocurrencies such as Bitcoin (BTC), Litecoin (SLD), Monero (XMR) and Dogecoin (DOGE) are part of the networks still in operation on proof of work consensus mechanisms without observable transition plans in the future.

Nvidia’s share the price also fall 5.89% over the last five days on the Nasdaq.