Graphics processor giant Nvidia revealed “nominal” cryptocurrency mining chip revenue in Q1 and anticipates revenues and profits to fall in Q2, causing its stock to plummet.
Nvidia’s share price fell in after-hours trade on Thursday after the company’s profit forecast for the second quarter fell short of forecasts.
Quarterly development was excellent from Q4 2021 to Q1 2022, with sales increasing by 8% to $8.98 billion and profits per share increasing by 3% to $1.36. As per the statement with the Securities and Exchange Commission, it also indicated that it would maintain a $15 billion share repurchase program until the conclusion of 2023. (SEC).
Meanwhile, the Q2 projection is less encouraging, with earnings likely to be $8.1 billion, which really is 4% lower than usual.
Traders were not impressed by the poor forecast, as Nvidia (NVDA) stock fell 7% to $157.8 in after-hours dealing on Thursday. NVDA has lost over half of its value this year, matching the industry’s low results in tech sectors.
Revenue of the company’s Crypto Mining Processor (CMP) fell to “nominal” rates in the first quarter, contrasted to $155 million a year ago. Although the report does not provide specific revenue numbers for CMPs, earnings have been declining in the last year.
In the second quarter of last year, Nvidia’s predicted CMP earnings fell by 33% to $266 million, followed by $105 million in the third quarter and $24 million in the fourth quarter. That has now dropped once more.
Due to “Russia and the COVID shut-downs in China,” Nvidia lowered its earnings estimates for the second quarter to $8.1 billion “plus or minus 2%.”
According to the research, these two variables alone might result in a $500 million drop in income.
The CMPs developed by the Santa Clara-based firm can be used to mine cryptocurrency (BTC), Ethereum (ETH), and a variety of other altcoins. Its graphics, which were meant for games, can be used to mine bitcoin if they aren’t constrained.
CMP stocks are highly limited, especially on online marketplaces, which may explain why revenues are so poor. When the CMP 170HX, the top version to yet, was released in October, it cost $4,700.
On May 6, Nvidia was fined $5.5 million by the Securities and Exchange Commission (SEC) for failure to declare how most of its funding comes from cryptocurrency mining in 2018. The revelation frightened traders, who dumped NVDA the next market day, dropping 6%.
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