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Nvidia states that cryptocurrency mining demand is gone, for now

Recent months have seen a slowing trend in the demand for cryptocurrency mining, with the cost of graphics cards steadily falling back to launch prices. According to Nvidia, the demand is now so low that it will be “immaterial” towards its profits for the second half of this year, with no estimations of when the trend will pick back up again.

Nvidia revealed the news during its second quarterly results, showcasing a lucrative first half of the year. Cryptocurrency is believed to have had a big impact on the company’s 40 percent growth in overall revenue in the second quarter, amounting to $3.1 billion. This forecast is set to change, however, as the chipmaker noted a steep dip in sales in comparison to its predictions.

“Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million,” said Nvidia’s Chief Financial Officer Colette Kress. “Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”

Nvidia managed to beat analyst estimations of 41.75 billion for its gaming sales, bringing in a total of $1.8 billion. This number isn’t just representative of the firm’s GPU sales, but its proprietary G-Sync technology seen in premium displays. There is also no way to accurately tell what graphics cards were bought for what purpose, with Chief Executive Jensen Huang explaining that even gamers can “do some mining” while they sleep.

Despite beating expectations during its second quarter, Nvidia has experienced a 5 percent dip in share prices thanks to lower predictions for the third quarter. The firm now expects revenue to drop to anywhere between of $3.19 billion to $3.32 billion, averaged out at $3.25 billion, compared to analysts that estimated $3.34 billion for the third-quarter. It also downplayed its gross margin forecast to 62.8 percent instead of the expected 62.9 percent analysts were hoping for.

Fortunately, Nvidia’s growth in other segments seems to be unaffected, with an 82.6 percent and 52.2 percent increase in data-center and core gaming revenue respectively. Cryptocurrency demand could rise again, but for now it seems that Nvidia will continue to focus on other areas, led by its gaming market.

KitGuru Says: It’s likely that the demand for cryptocurrency has weakened as signs of new GPU technology is right around the corner. Investing in current GPUs when there’s promises of performance increases would be a foolhardy move. Hopefully Turing doesn’t suffer as much as Pascal has when it launches.

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