IN A NUTSHELL:
- Nvidia may have misjudged the impact of the so-called cryptocurrency boom on its revenues in 2017-2018;
- According to an expert, cryptocurrencies miners could have generated as much as $1.95 billion in revenue – not $602 million, as Nvidia claims.
It seems that the collapse of the cryptocurrencies market may affect Nvidia's financial situation more strongly than the company assumes. At least according to Mitch Steves, an RBC analyst, who recently warned investors that the company might have misjudged how much of the GPU sale revenue generated in the period from April 2017 to July 2018 was the result of demand created by "cryptominers".
According to Nvidia's official data, over the period of several months, the company generated approximately $602 million in revenue thanks to the "miners". According to the RBC expert, the amount could have been more than three times higher and reached as much as $1.95 billion (for comparison, Nvidia's total revenue in Q4 2018 was probably around $2.2 billion). The analyst believes that the crypto sector of the GPU market was worth $2.75 billion – in his opinion, Nvidia controlled 75% of the sector.
The data is difficult to confirm – when buying a graphics card, people usually don't boast about what it will be used for. However, if Mitch Steves is right and the interest of miners was responsible for a much larger part of Nvidia's revenue, the collapse of the market may turn out to be a real, long-term problem for this company. The situation is not improved by reports of a possible loss of one of the company’s largest investors (the Japanese Softbank) and worse than expected financial results in the last quarter.
- Nvidia official website