Nvidia is looking bearish as the company doesn’t have any good news to share about its GPU sales during this quarter. Its most recent quarterly report and forecast suggest that the decline in demand for cryptocurrency mining is hurting the company.
The chipmaker projects that by the end of Q2 2018, sales to cryptocurrency-oriented customers will dive by as much as two-thirds of the previous value of $300 million. Even keeping in mind that the company makes most of its revenue from gamers and that it earned $3.21 billion in revenue in the first quarter of this year, a loss of $200 million in potential revenue has investors watching.
Nvidia has taken a hit in its stock price and is down $5 from Thursday.
Joseph Moore, an analyst at Morgan Stanley (NYSE:MS), isn’t too worried about the drop in demand from miners, projecting Nvidia’s stock price at $273 per share. He said that the market would settle once the company pulls through the turbulence.
“[It] should be cleaned up in the next couple of quarters while the numbers keep going up,” he added.
Nvidia’s not the only company looking at red spreadsheets this quarter; board manufacturers in Taiwan that make their orders from the company are also bracing themselves for drops in revenues as demand from miners.
The thing about people who mine cryptocurrencies is that they often buy in bulk, which often results in a huge increase in sales in the short term. Over a longer period, however, these miners do not need new GPUs for their rigs.
The appearance of an anti-ASIC movement among coin developers could help reignite the embers in Nvidia’s stock price, although that would depend on whether coin miners prefer second-hand hardware or not.
This article appeared first on Cryptovest
