Nvidia investors are already braced for weak Q2 results after the stock market closes today, but anthat sales for the period would be lower than it had estimated in May did not necessarily contain all the bad news about reduced demand from cryptocurrency miners.
The announcement, however, did not directly address the matter of demand for its graphics processing units from cryptocurrency miners. While the company said in recent filings with the U.S. Securities and Exchange Commission that there are too many variables for it to accurately forecast miner demand, there’s one big change coming that it does know about.
Ethereum miners have been widely using Nvidia’s flagship gaming GPUs to mine ether, putting pressure on the company’s ability to face gamers’ demands and prompting Nvidia to launch a specialized Cryptocurrency Mining Processor line last year but the interest in the product has been fading. CMPs accounted for “an insignificant amount” of the first quarter revenue compared to $155 million in the prior year, according to Nvidia’s last quarterly report.
“Clearly there has been some impact from both softer crypto demand and the shift of Ethereum to proof of stake and these factors, more so than changes in gaming, are the reason behind their lower expectation for gaming GPUs in the July quarter,” says Matt Bryson, senior vice president of equity research at Wedbush. “Whether the downtick in July fully accounts for those changes or whether there is still more room for sales to decline is one of the primary questions heading into the earnings call.
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