Nvidia Feels the Effect of "Crypto Hangover"
GPU Manufacturers Feel Effect of Crypto Mining Slowdown
The cooldown of the 2017 cryptocurrency boom has not only manifested in the prices of cryptocurrencies tumbling from their all-time highs, but has also had an effect on certain computer hardware manufacturers. The demand for graphics processing units, which are used for mining cryptocurrencies such as Ethereum ETH, 1.24% and Monero XMR, 2.03%, has shrinked considerably as mining has become less attractive.
AMD, for example, has said in its Q3 financial results report that blockchain-related GPU sales were “negligible”. The situation isn’t any better at Nvidia, its main competitor. Nvidia’s stock took a beating yesterday, falling by 17% in late trading after the company published its Q3 financial results. The company increased its revenue by 2.5% from Q2, which was below expectations of both analysts and the company itself.
The underwhelming revenue growth was, according to the company, mostly a result of weak demand from cryptocurrency mining. While this has indeed caused Nvidia’s graphics cards to come down in price and become more accessible to consumers, the lower prices resulted in less demand than the company anticipated. In a conference call, Nvidia CEO Jensen Huang commented:
“The crypto hangover lasted longer than we expected. When prices went down, we expected demand to pick up more quickly.”
This has resulted in excess inventory of Nvidia graphics cards building up at retailers, but the company expects the situation to correct itself and retrace to normal levels by the end of this quarter.
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