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Nvidia shares slump as firm warns that crypto-mining boom is over

GPU GIANT Nvidia saw its shares fall by almost six per cent in after hours trading on Thursday after the company reported lower-than-expected revenue guidance.

In finance, revenue guidance refers to a publicly traded corporation’s official prediction of its own near-future profit or loss, stated as an amount of money per share.

Revenue from original equipment manufacturers and intellectual property, including products for cryptocurrency mining, was down by 70 per cent at $116 million (£91m), well below the $188 million (£147m) analyst estimate, according to Reuters.

Nvidia said this was partly due to the demand for its cryptocurrency-related chips drying up.

“Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million while actual crypto-specific product revenue was $18 million, and we now expect a negligible contribution going forward,” said Nvidia chief financial officer Colette Kress during a conference call to analysts.

However, Nvidia’s CEO, Jensen Huang, added that executives don’t think cryptocurrency will be material to the company for the second half of the fiscal year.

Excluding contributions from cryptocurrency products, the firm reported that it expects to post $3.25 billion (£2.5bn) in revenue in the fiscal third quarter, give or take 2 per cent. However, analysts were expecting $3.34 billion (£2.62bn) for that period.

Nevertheless, the GPU firm posted some other more positive earning results for the quarter.

The company reported better-than-expected earnings results at $1.76 (£1.38) per share versus the $1.66 (£1.30) per share expected by analysts, and by division, things weren’t too bad either. 

Nvidia’s gaming division, which makes up nearly 60 per cent of total group sales, saw revenue rise 52 per cent from a year ago, while the company’s fastest pace of growth came from its data centre unit, where revenue was up 83 per cent.

And overall, Nvidia’s revenue grew 40 per cent year over year, according to a company statement. µ 

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Source : Inquirer

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