Key Points Nvidia sees crypto mining chips sales plummet 60% in Q3 Earnings for the quarter however has sent the stock rising, with Q3 revenues up 50% year-over-year The demand for gaming, 3D chips has contributed to the parabolic rise of Nvidia Ethereum going to Proof-of-Stake could factor into the slumped mining chip sales Nvidia, […] The post NVIDIA Mining Chip Sales Plunge 60% in Q3, but the Stock is Booming appeared first on CryptosRus.

NVIDIA Mining Chip Sales Plunge 60% in Q3, but the Stock is Booming

Key Points

  • Nvidia sees crypto mining chips sales plummet 60% in Q3
  • Earnings for the quarter however has sent the stock rising, with Q3 revenues up 50% year-over-year
  • The demand for gaming, 3D chips has contributed to the parabolic rise of Nvidia
  • Ethereum going to Proof-of-Stake could factor into the slumped mining chip sales

Nvidia, a major U.S. producer of computer chips required for crypto mining has seen sales for the chips plunge this quarter, even as the market has painted green candles abound.

Despite this, the company has seen parabolic growth this year, and today the stock (NVDA) actually reached a 52-week high of $327.60. The stock is up more than 100% year over year, and 42% this month. This yearly growth is due in large part to the global chip shortage, and the increase in demand for chips in the crypto and gaming industries.

Silicon microchips are needed in everything from phones to vehicles to GPUs. COVID caused wrack and ruin in many industries, but in the microchip industry especially. The supply-chain woes we are currently seeing in the states have magnified this problem further. These GPUs (Graphics Processing Unit) are used to mine Ethereum mostly, as you cannot use GPUs to mine Bitcoin, only ASICs. Ether’s mining algorithms run best on graphics cards.

Nvidia said on Wednesday that CMP sales declined 60% “sequentially to $105 million in the most recent quarter.” They said that sales of their mining-specific chips are expected “to decline to very negligible” in the fourth quarter. Sales for this product plummeted from $266 million Q2 to only $105 million in Q3. However, these declining sales have not hurt the stock at all, as mentioned before, it’s up 123% YTD.

The decline certainly could be contributed to the fact that Ethereum is moving to proof-of-stake, and therefore the mining (PoW) element will be eradicated and blocks will be verified according to holders stake in the network. Rather than “voting” with hash power, your vote comes from your stake. The company has also tailored some of its software to favor graphics cards for gaming which makes them less suited for crypto mining.

Cryptocurrency’s price and demand have historically had an impact on Nvidia. In 2018 when crypto slumped, Nvidia’s stock took a hit, and with 2021 seeing the crypto market skyrocket to a 3 trillion dollar market, Nvidia has ridden the wave all the way up, too. But with most protocols launching as Proof-of-Stake, and Bitcoin becoming too big for GPUs, Nvidia has leaned on its skyrocketing demand for gaming GPUs.

They warned on Wednesday that they have seen “overwhelming demand” for this holiday quarter. Moreover, the metaverse may have something to do with the surge in Nvidia’s stock price in the last month. These immersive concepts posited for the metaverse would potentially require 3D graphics, and Nvidia could become the key supplier to make the metaverse work.

Mining relies on these silicon chips, including ASICs used to mine Bitcoin, however, Bitmain basically owns that market. It could put the mining industry in peril if there was some supply chain shortage or chip shortage that really sunk its teeth in. We have yet to see either really impact miners as of yet. However, silicon chips are also used in the RAM memory chips needed for validating blocks in proof-of-stake, and of course, 3D graphics cards needed for the metaverse.

Maybe the lesson is if you believe in crypto then investing in silicon and the producers of it like NVIDIA is the wise play.

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