The market capitalization of the manufacturer of graphics processors (GPU) Nvidia fell to $23 billion in connection with the decline in stock prices. Analysts rushed to explain the situation to the fall in demand on the graphics card from the side of the miners. However, such conclusions were not entirely correct.

Last week Nvidia showed the media report earnings for the third quarter of this year. From the document it became clear that gross profit of the company for the period decreased by 1.8%, although Nvidia predicted more positive figures, as they hoped that the demand on the GPU among miners will increase. The company’s shares after the publication of the report has fallen in price on 16%. Head of Nvidia Juan Genesung (Huang Jensen) recognized that the team were wrong in their forecasts, and “crypto-hangover” turned out to be longer than she expected.

A decrease in demand on video cards for mining crypto-currencies, the company reported in August. Then Nvidia CFO Colette Kress (Colette Kress) told me that the company no longer expects a substantial profit from business-oriented cryptocurrency.

“According to our forecast revenues, products for mining cryptocurrency was supposed to bring the company $100 million less, and in fact $18 million. Moreover, in making this forecast, we assumed that the cryptocurrency will be meaningful throughout the year. Now, we do not expect income in the future,” — said Kress.

This statement of the Finance Director made the market for three months to think that cryptocurrency business, Nvidia has come to an end. For this reason, the decline in the market capitalization of the company at $23 billion fast associated with problems in the cryptocurrency business, although with CNBC analyst Jim Cramer (Jim Cramer) believes that the main factor of the fall was precisely the wrong forecasting revenues and not the current situation with the sales of graphics cards for mining.

“Nvidia still is the best manufacturer of graphics processors, which have become more powerful than traditional microprocessors. The company still wins in the competition in many areas of application… I think Nvidia made an honest mistake predict, though, given what is happening now, it was a mistake that could have been avoided,” said Kramer.

Another analyst from Goldman Sachs Toshiya Hari (Toshiya Hari) believe that the decline in the value of Nvidia stock, mainly due to the averaging characteristics of the gaming GPU company and adjusted in-game by single-chip system (SoC).

Also worth noting is the growth in demand for ASIC miners, which cannot fail to impact the GPU. So in the first quarter of 2018, the income Nvidia amounted to $550 million, at the same time as Bitmain, the manufacturer of equipment for mining on ASIC earned $1.1 billion. Miners are increasingly choosing equipment on the ASIC chips because these devices are really efficient. The main cryptocurrency can’t be produced by graphics processors with enormous computational capacity, as these models have high power consumption. Their use is particularly disadvantageous for large companies challenging market and displacing individual miners.