Nvidia is slipping ahead of earnings

Ivan Schwartz
August 19, 2018

Chief Financial Officer Colette Kress said last quarter that cryptomining revenue in the second quarter would be only $100 million, so the more precipitous decline means it will be almost nil in the future. There is also no way to accurately tell what graphics cards were bought for what objective, with Chief Executive Jensen Huang explaining that even gamers can "do some mining" while they sleep.

The expected decline in revenue from crypto sales has also been reported by Nvidia's main competitor AMD.

A "sharp decline" in this sector led to a year-on-year drop of 54 per cent in revenue in the GPU specialist's OEM segment and a 70 per cent decline quarter-to-quarter.

"Growth across every platform - AI, Gaming, Professional Visualization, self-driving cars - drove another great quarter", said Jensen Huang, founder and CEO of NVIDIA. While the business anticipated the demand to remain throughout the year, projections account for no contributions going forward.

For the third quarter, Nvidia forecasted its revenue to be within 2% of $US3.25 billion where the Street had expected $US3.34 billion.

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Nvidia has reported a 40% year-on-year boost, though weakening demand in the cryptocurrency business unit dampened excitement. The red team similarly survived the crash and is sure to see minimal contributions from mining demand going forward as well. Nvidia's stocks are now 4.8% down at the time of writing.

Additionally, a group of analysts polled by FactSet predicted that the company's revenue from gaming and servers sales would continue to grow, though crypto mining sales will likely continue to decline. Since the beginning of 2016, Nvidia shares have risen 769%, compared with a 48% rise in the S&P 500 Index. Trip Chowdhry of Global Equities Research said in a note to clients that the "secular growth trends" in data centers remains, and it's "not stopping anytime soon".

In January this year, the price of Nvidia's latest flagship card, the GeForce GTX 1080Ti, went up from a suggested price of $700 to nearly $1300.

Nevertheless, the GPU firm posted some other more positive earning results for the quarter. The company's stock had a trading volume of 18,468,686 shares, compared to its average volume of 13,109,413. Data centre revenue increased 83% to $760-million.

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