According to Nvidia‘s CFO Collete Kress, the company is unable to accurately anticipate how the decline in crypto mining will impact earnings in the second quarter. On Wednesday, this information came in lower than what analysts had anticipated.
The semiconductor manufacturer disclosed its financial results for the three months ending on July 31, which showed a decrease in sales of 19% quarter-on-quarter to a total of $6.5 billion and a decrease in net income of 59% to a total of $656 million.
According to Nvidia, the revenue for its gaming segment, which includes sales of its high-end GPUs, declined by 44% from the previous quarter to $2.04 billion as a result of challenging market circumstances.
Nvidia has limited visibility into how the cryptocurrency market drives demand for its gaming products, according to Kress, who also serves as the company’s executive vice president.
Nvidia is unwilling to speculate on how the reduced demand for cryptocurrency mining will impact profitability for the second quarter. The graphic processing units (GPUs) manufactured by the chipmaker were initially developed for gaming; however, the increased demand for GPUs to be used in cryptocurrency mining operations in recent years has resulted in the share price of the company increasing by 320% over the course of the previous five years.
However, Kress claimed that falling cryptocurrency values as well as changes in consensus processes had previously altered both the demand for its items as well as the company’s capacity to estimate it:
The Ethereum Merge is scheduled to take place on September 15, and the transition of the network’s consensus mechanism to proof-of-stake may further lower demand for cryptocurrency mining equipment. This may present a challenge for bitcoin mining hardware such as Nvidia’s CMP170 HX, which retails for approximately $4,695 at the time of this writing.
Despite this, several cryptocurrency networks, including Bitcoin (BTC), Litecoin (LTC), Monero (XMR), and Dogecoin (DOGE), continue to use proof-of-work consensus procedures, and there are no signs that this will change in the foreseeable future.
Nvidia’s share price has dropped by 5.89% over the course of the past five trading days on the Nasdaq.
Read up on the most recent news around cryptocurrencies.
DC Forecasts is the industry leader in a wide variety of crypto news categories because we adhere to the most stringent editorial principles and work hard to achieve the best journalistic standards possible. If you are interested in contributing to our news website or offering your experience in a particular area, please do not hesitate to get in touch with us at firstname.lastname@example.org.