The results indicate that the revenue plunged almost 77% from $105 million to $24 million, driven by possible factors like shifting focus from proof-of-work centered cryptocurrencies for energy-efficient proof-of-stake assets.
The drop also comes when other chip makers like Intel have entered the crypto mining space. Notably, Intel claims that its latest processor for mining is 1,000 times faster than the standard chips for SHA-256.
Nvidia also cited crypto volatility as a possible reason for dropping demand. According to Nvidia:
“Volatility in the cryptocurrency market including changes in the prices of cryptocurrencies or method of verifying transactions, such as proof of work or proof of stake, can impact demand for our products and our ability to accurately estimate it.”
However, Nvidia is expecting a possible surge in demand for its mining processors that might be required to mint non-fungible tokens.
In general, Nvidia crypto mining processor sales performed below the expected figure, although the segment began 2021 on a high note. For example, during Q2, Nvidia estimated the sales at $400 million but only recorded $266 million. By Q3, the decline continued to hit $105 million.
The company entered the mining business by developing the processor to lower the demand from miners utilizing the company’s Graphics Processing Units (GPUs).
It is worth noting that Nvidia attempted to limit its GPUs by designing them to be less appealing to miners. Notably, Nvidia has reiterated that almost all Ampere-based products will have a hash rate limiter to prevent miners from utilizing them.
However, despite Nvidia’s mining venture revenue slump, the company’s 2021 income surged 61% to over $12 billion.
Impact on NVDA stock
Posting positive results in recent years has acted as a key driver for Nvidia’s stock. However, the stock is likely to surge with increasing global demand for chips.
As per Finbold’s previous report, due to expected demand, Nvidia is well-positioned to hit the estimated $350 per share by the end of 2022.
As of press time the NVDA stock is trading at $251, down 5% in the last 24 hours.
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