Colette Kress, CFO of graphics card giant Nvidia, says the company is unable to estimate how lowered crypto mining demand affected its Q2 results, which came up short of analyst assumptions on Wednesday.

The chipmaker reported financial results for the three months ended July 31, revealing a 19% quarter-on-quarter decrease in revenue to $6.5 billion and a 59% drop in net income to $656 million.

Nvidia's gaming division revenue fell 44% from the previous quarter to $2.04 billion, owing to "challenging market conditions."

The company has limited visibility into how the market affects demand for its gaming products, according to Kress, who also serves as executive vice president of the company.

"Our GPUs can mine cryptocurrency, but we have restricted visibility into how much this affects our overall GPU demand."

"We are unable to precisely quantify the extent to which decreased cryptocurrency mining made a contribution to the decline in Gaming demand," she added.

While the chip maker's graphic processing units (GPUs) were originally intended for gaming, high demand for crypto mining activities in recent years has helped contribute to a 320% increase in the firm’s share price over the last five years.

However, Kress stated that in the past, falling prices and changes in the consensus mechanism had impacted the demand for its products and the capacity to estimate it.

"Volatility in the market, such as drops in cryptocurrency prices or changes in transaction verification methods, such as proof of work or proof of stake, has previously impacted, and will continue to impact, demand for our products and our capacity to accurately estimate it."

With the Ethereum Merge anticipated for September 15, the network's consensus change to proof-of-stake (PoS) may reduce demand for crypto mining hardware even further. This could be problematic for mining products like Nvidia's CMP170 HX, which is currently priced at around $4,695.

However, cryptocurrencies such as Bitcoin, Litecoin, Monero, and Dogecoin are among the networks still using proof-of-work consensus mechanisms, with no visible plans to transition soon.

On the NASDAQ, Nvidia's share price has fallen 5.89% in the last five days.

Posted 
Aug 25, 2022
 in 
Crypto News
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