Nvidia’s chief financial officer said falling cryptocurrency prices and changes in the consensus mechanism have impacted demand for its products and the company’s ability to estimate.
Nvidia CFO Colette Kress said the company was unable to estimate how falling demand for cryptocurrency mining had affected Q2 results, which fell short of analysts’ expectations.
The company released its financial results for the three months that ended July 31. It revealed revenue fell 19% q-o-q to $6.5 billion, while net income fell 59% to $656 million.
The gaming division’s revenue, including sales of high-end GPUs, fell 44% q-o-q to $2.04 billion, which Nvidia attributed to challenging market conditions.
Kress, the company’s executive vice president, said Nvidia has affirmed the company’s limited vision of how the cryptocurrency market affects demand for its gaming products:
“Our GPUs are capable of mining cryptocurrencies, although we have limited visibility into how this will affect the company’s overall GPU needs. We were unable to pinpoint the exact extent to which the decrease in cryptocurrency mining has contributed to the decrease in demand for gaming.”
While the company’s graphics processing units (GPUs) are designed for gaming purposes, the high demand for cryptocurrency mining operations over the past few years has contributed to the company’s share price up 320% over the past 5 years. Kress said that falling cryptocurrency prices and changes in the consensus mechanism in the past have impacted demand for their products and their ability to estimate:
“Volatility in the cryptocurrency market, such as falling cryptocurrency prices or changes in transaction verification methods has had an effect in the past. In the future, that could affect demand for the product and our ability to accurately estimate it. ”
The Merge event may continue to reduce the demand for cryptocurrency mining hardware. This could spell trouble for cryptocurrency mining products like Nvidia’s CMP170 HX, which currently costs around $4,695. Nvidia’s share price has also fallen 5.89% over the past five days on the Nasdaq.