AI-Linked Tokens Maintain Gains Following Nvidia's Impressive Performance, Strengthening Positive Outlook
Nvidia blames a lack of visibility into the effects of cryptocurrency mining on Q2 results
The New York Mining Moratorium's chances have just gotten a whole lot worse
Colette Kress, CFO of graphics card behemoth Nvidia, claims that the business is unable to predict how reduced demand for crypto mining affected its Q2 earnings, which were released on Wednesday and fell short of analyst estimates.
The global leader in semiconductors published its financial results for the three months ending July 31. Revenue declined by 19% from quarter to quarter to $6.5 billion, while net income dropped by 59% to $656 million.
Nvidia blamed "difficult market conditions" for the gaming division's revenue decline of 44% from the prior quarter to $2.04 billion, which includes sales of its high-end GPUs.
In addition to being the company's executive vice president, Kress claimed that Nvidia has no insight into how the cryptocurrency market influences consumer demand for their gaming products:
Although we have little visibility into how much this affects our general GPU usage, our GPUs are capable of mining cryptocurrencies.
She continued, "We are unable to precisely measure the degree to which decreased bitcoin mining led to the reduction in Gaming demand."
Despite the fact that the chip giant's graphic processing units (GPUs) were made for gaming, recent growth in the popularity of cryptocurrency mining has helped to drive up the share price of the business by 320% over the past five years.
However, according to Kress, declining cryptocurrency values and modifications to the consensus method have in the past affected the demand for its products and the capacity to predict it.
The demand for our products and our ability to accurately anticipate it have previously been impacted by volatility in the cryptocurrency market, such as reductions in cryptocurrency values or changes in the manner of confirming transactions, such as proof of work or proof of stake.
The network's switch to proof-of-stake consensus, which is planned to occur on September 15, might further reduce the demand for cryptocurrency mining equipment. Products used for mining cryptocurrencies, such the $4,695 Nvidia CMP170 HX, could have difficulties as a result.
Despite this, networks that still use proof-of-work consensus mechanisms include Bitcoin (BTC), Litecoin (LTC), Monero (XMR), and Dogecoin (DOGE), with no obvious plans to switch to other types of consensus in the near future.
On the Nasdaq, the share price of Nvidia has decreased 5.89% over the previous five days.
