Nvidia will increase profits, regardless of the mining
Analysts predicted profit growth in the second quarter, despite falling revenues from the sale of equipment for mining cryptocurrency.
Company FactSet surveyed analysts who suggested that the revenue Nvidia will increase this quarter regardless of the movements of the cryptocurrency market. Estimated revenue growth is expected with growing demand for video gaming and data processing on GPU from Nvidia.
Thus, the expected decline in profits from the sale of equipment for mining cryptocurrency, but these losses are easily compensated by the forecast sales of graphics cards for games and servers. The expected revenue growth from the gaming sector reaches 47% (about $1.75 billion), and from the sale of data centers 78% ($740 million).
Evercore Analyst C. J. The ICC supports the view of analysts and believes that implementation of devices for games, data processing, and AI remains a key source of profit for Nvidia.
We believe that concerns about reducing the company’s profit from sales of devices for the mining of cryptocurrencies is not justified. Yes, it is possible the decline in sales in this area because of the lack of stability in the stock market. However, Nvidia will easily cover the loss with other revenue sources.
In may, Nvidia reported that it earned approximately 289 million U.S. dollars from sales of GPU for cryptocurrency mining. Thus, the cryptocurrency boom has brought the company about 9% of total revenue in the first quarter of 2018, which is equal to $3.2 billion.
Now Nvidia expects that in the second quarter sales of graphics cards for mining will be reduced by two thirds. These estimates were confirmed in July, when the cost of the GPU started to decline gradually as supply exceeded demand.
Recall that the main competitor is Nvidia company Advanced Micro Devices (AMD), which in April released a report for the first quarter, according to which 10% of the company’s revenues had on the mining hardware.