Our crypto business is dead and it’s never coming back — NVIDIA

Nvidia Falls 5% as Demand for Crypto-Related Chips Dries Up

Nvidia Falls 5% as Demand for Crypto-Related Chips Dries Up

The mining of cryptocurrency tokens, computer code that carries value in online transactions, had helped stoke demand for graphics chips.

Shares of Nvidia slid as much as 1.2% to $256 in trading Thursday ahead of the chipmaker's second-quarter earnings report after the closing bell.

A "sharp decline" in this sector led to a year-on-year drop of 54 per cent in revenue in the GPU specialist's OEM segment and a 70 per cent decline quarter-to-quarter.

Nvidia founder and Chief Executive Officer Jensen Huang is reshaping his company to take advantage of trends that are changing computing. "While actual crypto-specific product revenue was $18 million, and we now expect a negligible contribution going forward".

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Nvidia the large US based GPU manufacturer saw shares drop, with a correlation believed to be due to the decline in cryptocurrency mining.

The writing of a crypto slowdown had been on the wall for quite some time. Nvidia is now expecting the third quarter revenue to be between $3.19 billion and $3.32 billion, lower than the expected and predicted, $3.34 billion.

"Turing is a giant leap forward and the greatest advance for computing since we introduced CUDA over a decade ago", Huang said.

The company also announced plans to return $US1.25 billion to shareholders in fiscal year 2019, starting with a $US0.15 dividend per share on September 21 to all shareholders on record as of August 30. That fell short of analysts' forecast of $3.34 billion.

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Additionally, a group of analysts polled by FactSet predicted that the company's revenue from gaming and servers sales would continue to grow, though crypto mining sales will likely continue to decline.

Still, the second quarter continued Nvidia's steady strong growth in earnings across most of its markets, including AI, gaming, self-driving cars and visualization.

Gaming, Nvidia's largest business, was the second-fastest growing unit in Q2, with a 52 percent increase to $1.8 billion from the same period previous year. Turing, as it's called, will also make its way into gamer- and data-center chips.

Similarly, the company's revenue from the data-centers will spike by over 78 percent, bringing in about $740 million.

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Nevertheless, the GPU firm posted some other more positive earning results for the quarter.

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