Famed Chip Manufacturing giant Nvidia has apparently made an official announcement to back out from the crypto-mining industry altogether. Only when the company was hoping to make an impact on crypto-space, the news of its quitting popped up.
As per statements from Nvidia CFO, Colette Kress, the revenue decline was perhaps the main reason behind this decision.
“We believe we’ve reached a normal period as we’re looking forward to essentially no cryptocurrency as we move forward[..]Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million, and we now expect a negligible contribution going forward”
Historically Nvidia (NASDAQ: NVDA) has remained a global behemoth in chip manufacturing and the tech industry in general. Very recently we had seen company entering into cryptocurrency mining sector and also hoped that it might turn out to be a market leader through this. But looking at the company’s last quarter earnings report, there was a steep decrease in profits. Although there was a short-term boost in the initial days the plummeting price of digital currencies made had an adverse impact on the company.
Also, Kress stressed on the fact that the earnings through crypto might not be huge but it did have a marginal effect on overall revenue. But looking at an overall picture of cryptocurrency volatility, the company cannot completely rely upon this sector. The optimistic words from CFO read as below,
“It still has a derivative impact on our stack in terms of what we are selling and to both replenish the overall channel and such. So, over the last several quarters, that we had stabilizing that overall channel, we did get the great effect of selling just about everything and our margins really been able to benefit from that.”
Interestingly, the CEO Jensen Huang was never satisfied with this venture and openly admitted that ‘Crypto-mining did not add much to company’s earnings but at this juncture we consider it to be immaterial for the second half‘.
We all are aware that Nvidia GPU cards are widely famous in the gaming industry but with the emergence of digital currency mining sector, the demand for the same was increased. As per speculations, Nvidia plunged into this business to take advantage of this factor but the decline in crypto pricing made it back out this sector.
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