American graphics processing units (GPU) manufacturer Nvidia has recently revealed it netted $289 million from cryptocurrency-related sales in this year’s first quarter, well above expectations. The company added, however, that it expects the figure to be much smaller in the next quarter.
According to the company’s report, the $289 million figure represents about 9 percent of its overall $3.2 billion revenue. Susquehanna analyst Christopher Rolland had anticipated the figure to be much lower, of about $200 million.
Per Nvidia’s CEO Jensen Huang, the company managed to beat expectations thanks to demand created by cryptocurrency miners. By buying GPUs at an incredibly fast rate these forced their price to increase, which ended up pricing gamers out of the market. He said:
“Crypto miners bought a lot of our GPUs in the quarter and it drove prices up. I think that a lot of gamers weren’t able to buy into the new GeForce as a result.”
The GPU manufacturer’s chief financial officer (CFO), Colette Kress, noted that the company expects cryptocurrency-related revenue to fall by as much as 65 percent in the next quarter, to about $100 million. While retail prices surged earlier this year, the cryptocurrency ecosystem’s recent correction saw various miners lose interest and sell their rigs.
This likely helped ease demand, which will in turn allow gamers to get back in the market. According to Kress, “while supply was tight earlier in the quarter, the situation is now easing.” He added that gamers who had been priced out of the market are now being able to buy GPUs at a reasonable price.
AMD, Nvidia’s main competitor, last month revealed that about 10 percent of its overall sales came from cryptocurrency miners. The company’s CEO Lisa Su, as covered, recognized that blockchain technology is important, but added it was a “bit of a distraction.”
Market analyst Kevin Cassidy noted that the reliance these companies have on cryptocurrencies is concerning some investors. Nvidia’s earnings surpassed expectations, something Cassidy claims “may not be a good thing for shares trading at 40x forward earnings.”
Nvidia’s CEO has earlier this year, at a time in which the company’s shares surged thanks to the crypto boom, revealed he thinks cryptocurrencies are “not going to go away.”At press time, Nvidia’s shares are down by about 3 percent in extended trading, after the company’s stock closed at a record $260.