Nvidia is unable to predict how lower crypto mining influenced Q2 earnings, according to CFO Collete Kress. This information came in below analyst estimates on Wednesday.
The chipmaker reported its financial results for the three months ending July 31, revealing a 19% quarter-on-quarter reduction in sales to $6.5 billion and a 59% drop in net income to $656 million.
Revenue for its gaming sector, which includes sales of its high-end GPUs, decreased 44% from the previous quarter to $2.04 billion, owing to difficult market circumstances, according to Nvidia.
According to Kress, who also serves as the company’s executive vice president, Nvidia has limited visibility into how the crypto market influences demand their gaming products:
“Our GPUs are capable of cryptocurrency mining, though we have limited visibility into how much this impacts our overall GPU demand.”
“We are unable to accurately quantify the extent to which reduced cryptocurrency mining contributed to the decline in Gaming demand,” she further added.
Nvidia is unable to predict how lower crypto mining demand influenced Q2 earnings. While the chipmaker’s graphic processing units (GPUs) were originally built for gaming, increased demand for crypto mining operations in recent years has led to a 320% spike in the company’s share price over the previous five years.
However, Kress stated that dropping cryptocurrency values and changes in consensus mechanisms had previously influenced the demand for its goods and the ability to estimate it:
“Volatility in the cryptocurrency market – such as declines in cryptocurrency prices or changes in method of verifying transactions, including proof of work or proof of stake — has in the past impacted, and can in the future impact, demand for our products and our ability to accurately estimate it.”
With the Ethereum Merge expected on September 15, the network’s consensus move to proof-of-stake may reduce demand for crypto mining gear even further. This might be problematic for bitcoin mining machines like Nvidia’s CMP170 HX, which costs roughly $4,695.
However, cryptocurrencies like as Bitcoin (BTC), Litecoin (LTC), Monero (XMR), and Dogecoin (DOGE) are among the networks that are still using proof-of-work consensus processes, with no visible intentions to shift in the near future.
On the Nasdaq, Nvidia’s stock has declined 5.89% in the previous five days.
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