Home » Nvidia GPU chips used for mining crypto are hurting demand

Nvidia GPU chips used for mining crypto are hurting demand

by admin

Chip designer and computing company Nvidia Corp posted better-than-expected third-quarter sales on Wednesday. This was due to strong demand for data center business on the back of increasing cloud adoption. Nvidia’s GPU chips are popular for cryptocurrency mining, but the crypto market crash has also hit demand. CEO Huang said he does not believe blockchain will become an important part of the business.

Data center revenue increased 31% year-over-year in the third quarter, while gaming revenue decreased 51% year-over-year. NVIDIA shares rose 1% in after-hours trading.

Cloud companies are increasingly using Nvidia chips in their systems. microsoft Corp is working with the company to build “big-scale” computers that handle advanced artificial intelligence computing tasks in the cloud.

As of August, Nvidia’s market share of so-called accelerator chips in the infrastructure of the world’s six largest clouds had grown to 85%, broker Jefferies said in an October memo.

US export restrictions have been a source of concern, but Nvidia’s production of a downgraded version of the A100 called the A800, which complies with recent export control rules, is bright as it helped mitigate the financial blow. became the material.

Nvidia’s chief financial officer, Collette Kress, also said that while export restrictions affected earnings in the third quarter, the decline was “largely offset by sales of alternative products to China.” says.

When raising the share price from “hold” to “buy,” Kinngai Chan, an analyst at Summit Insights Group, said, “The export restrictions imposed by the U.S. Department of Commerce have increased as customers in China began hoarding data center GPUs. has been a blessing to Nvidia.”

When asked if the A800 chip meets China’s export regulations, but also the spirit of the regulation, Nvidia CEO Jensen Huang said, “It meets a clear standard in letter and spirit. there is,” he said.

Chip industry executives have asked whether Nvidia has approved the change with the Department of Commerce.Nvidia previously declined to comment on the matter.

While Nvidia’s once-profitable gaming business was hit by sluggish consumer demand, there was also a shift in how the Ethereum cryptocurrency was created.

“This may have contributed to an increase in aftermarket sales of GPUs in certain markets, and may impact demand for some products, especially at the low end,” said Kress. .

The company’s adjusted revenues for the quarter ended October 30 were $5.93 billion. On average, analysts expected him to make $5.77 billion in revenue, according to Refinitiv data.

Nvidia is forecasting revenue of $6 billion (plus or minus 2%) for the quarter, while the forecast is $6.09 billion.

Related Posts

Leave a Comment