Nvidia, the largest graphics processing units (GPUs) manufacturer in the world, recently saw its stock price drop over 6% after releasing its estimates for the third quarter of this year. The company revealed crypto-related sales fell in Q2, and it won’t project them for the rest of the year.
According to Bloomberg, Nvidia’s revenue for the fiscal third quarter was forecasted to be about $3.25 billion, falling short of analysts’ average estimate of $3.35 billion. Behind the drop could be the company projecting no revenue from crypto customers in the future.
Nvidia's stock price dropped by more than 5% after-hours trading.— Larry Cermak (@lawmaster) August 17, 2018
"Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.” pic.twitter.com/PVTEFESLJI
As CryptoGlobe covered, Nvidia raked in $289 million from cryptocurrency-related sales in this year’s first quarter, and expected a 65% drop for the second quarter to $100 million. Instead, the total revenue from crypto sales was of $18 million.
According to MarketWatch Colette Kress, Nvidia’s chief financial officer, stated:
“Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million. Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”
Despite the crypto market’s slump, Nvidia was still able to raise its total revenue in Q2 to a record $3.12 billion, above analysts’ estimate of $3.11 billion. The company’s net profit was of $1.1 billion, or $1.76 a share, well above its $583 million, or 92 cents, from last year.
The GPU manufacturer has, according to its founder and CEO Jensen Huang, been convincing data center owners that modified GPUs are the best solution they have to handle the surge in artificial intelligence’s (AI) needs to keep fueling the growth of voice and image recognition.
While data centers now account for a fifth of the company’s revenue, Bloomberg noted, the gaming industry is still its main income source. Despite the crypto-related sales decline, sales from gaming surged 52% to $1.8 billion, and data center-related sales surged 83% to $760 million.
While Nvidia won’t project any revenue from cryptocurrency miners in the future, its CEO has in the past revealed he believes cryptocurrencies are a “real thing” that is “not going to go away.” At the time, he downplayed the role cryptocurrency miners’ sales had in the company’s revenue last year.
Despite Nvidia’s displeasure with crypto miners, its revenue is on course to double from 2016. Its growth has been attracting investors that helped its stock reach $257, up from $159 last year, according to Yahoo Finance data.
As recently covered Nvidia rival Advanced Micro Devices, Inc (AMD) revealed it expects “near zero” revenue from GPU sales to cryptocurrency miners in the third quarter of this year. Chipmakers’ revenue from crypto miners has been declining because of the cryptocurrency market’s bearish trend.