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Nvidia released its financial results for the second quarter of this year, reporting that overall revenue fell 19% from the previous quarter. The company cited weakness in its gaming business as the reason for the decline, but claimed it was unable to assess how much cryptocurrency mining contributed to it.
Meanwhile, according to a recent blog post by the Ethereum Foundation, Ethereum will have until September 20 to complete the merger. The upgrade will completely eliminate the need for miners, which could further reduce the need for Nvidia GPUs.
Cryptocurrency miners are major customers of Nvidia GPUs
Cryptocurrency miners have long been one of the main customers of Nvidia graphics cards. They are already using these devices to mine Crypto coins, mostly Ethereum. The rising price and popularity of ETH and tariffs on Chinese imports have further increased demand for Nvidia GPUs.
In fact, the SEC announced charges against the chipmaker earlier this year, alleging that it misled investors by reporting a huge increase in “gaming”-related revenue while concealing much of it Success is related to cryptocurrency mining. Nvidia paid $5.5 million to settle the allegations.
“The SEC order finds that, in several consecutive quarters of NVIDIA’s fiscal 2018, the company failed to disclose that cryptocurrency mining was the substance of its sale of its graphics processing units (GPUs) for game design and marketing. important factor in sexual income growth.”
Nvidia’s revenue falls on lower demand for GPUs
Nvidia’s financial results for the second quarter of this year were down sharply from the first quarter. The company reported revenue fell 19% sequentially to $6.5 billion, while net income fell 59% to $656 million.
The chipmaker’s gaming revenue took a bigger hit, falling 44% from the previous quarter to $2.04 billion. Nvidia attributed the drop to “challenging market conditions,” but claimed they were unable to assess how the drop in GPU demand would affect revenue. Nvidia CFO Colette Kress said:
“Our GPUs are capable of crypto mining, although we don’t know much about the extent to which this affects our overall GPU demand. We cannot accurately quantify the extent to which a reduction in crypto mining has affected the drop in demand for games.”
Nvidia’s GPUs are primarily designed for gaming purposes. To stop cryptocurrency miners from grabbing GPU supply, the company even announced cryptocurrency mining restrictions. However, cryptocurrency miners have mostly succeeded in overcoming these limitations, maintaining high demand for GPUs.
Kress noted that the volatility of crypto makes it difficult for chipmakers to estimate how cryptocurrency mining will affect demand for GPUs. He says:
“Volatility in cryptocurrency markets — such as declines in cryptocurrency prices or changes in the method of verifying transactions, including proof-of-work or proof-of-stake — has impacted and may impact demand for our products in the past and in the future. Accurate estimated capacity.”
Meanwhile, Ethereum will undergo a merger between September 10th and 20th. The upgrade will completely eliminate the need for miners who currently secure the network and will replace them with validators. This could further reduce demand for Nvidia GPUs.
Shares of Nvidia ended the day largely flat, but fell about 5% in after-hours trading on Wednesday. Shares of the company are currently down more than 3.5% in premarket trading.
How do you think the merger will affect Nvidia’s gaming business in the third quarter of this year? Let us know in the comments below.
About the author
Ruholamin Haqshanas is an accomplished crypto and financial journalist with over two years of writing experience in the field. He has an in-depth understanding of all areas of the fintech space, including the decentralized iteration of the financial system (DeFi) and the emerging market of non-fungible tokens (NFT). He is an active user of remittance Crypto assets.
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