Graphics Processing Units manufacturer Nvidia, witnessed a drop in its stocks after the firm released its recorded estimates of the third quarter, as reported by MarketWatch. The alleged decrease in revenue was the result of the decline in crypto mining after a majority of digital currencies crashed in the crypto market earlier this year.
The closing price of Nvidia shares in the regular session was $257.44, as it plummeted by 0.6%. The extended session saw a much worse decline of more than 5%.
The company is not surprised as the sales related to blockchain tech were already estimated to be significantly less. The revenue forecast made by the company was somewhere between $3.19 billion and $3.22 billion, a figure lower than what the analysts had predicted ($3.24 billion).
Colette Kress, Chief Financial Officer, Nvidia was quoted as saying, “Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million. Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”
However, the revenues generated from Nvidia’s gaming sector is expected to grow by an impressive 47% to $1.75 billion. On the other hand, revenue from the data center sector is predicted to hike to $740 million by 78%.
Nvidia is a company that has a promising future considering the growth displayed in the last two years. The firm’s net income in the second quarter was $1.1 billion which was way higher than what it was the previous year, $583 million.
The analysts also put forward a comparison between Nvidia and Advanced Micro Devices Inc. (AMD). They explained the situation saying, “Cryptocurrency strength has to some degree offset the slow and steady progress establishing momentum in desktop and server microprocessors after several years away from those markets — but that higher revenue has driven higher operating expense, which further raises the bar for the processor business if crypto momentum should fade.”