Nvidia has released earnings report for the third quarter of 2018, which implies that the demand for graphics processor units (GPU) among miners has not increased, contrary to the expectations of the company.
In the report of the head of Nvidia Juan Genesung (Huang Jensen) writes that the results show an excess of inventory and this means that the plan to sell was not implemented. The company is required to adjust the reserves for the future. The reason for this situation was that prices on GPUs have grown during the “cryptocurrency boom”, did not decrease quickly enough after the demand has decreased. And this, in turn, caused a further drop in demand.
“”Crypto-hangover” lasted longer than we expected. It seemed to us that we have done a more effective job of managing the dynamics of cryptocurrency,” admitted Genesung.
The company has spent nearly $70 million in inventory in the third quarter, suggesting that demand for graphics cards among the miners, at least, will not decrease. For the period Nvidia recorded a decrease in gross profit of 1.8%. This is due to the $57-million cost of creating the previous generation chips, suitable for mining cryptocurrency.
Total revenues of Nvidia for the third quarter amounted to $3,18 billion, which is 21% more than for the similar period last year and 2% higher than in the previous quarter. Despite this, after the publication of the report of the company’s shares have fallen in price on 16%. Most likely, this is due to expectations: indeed, in August, forecasts the Nvidia sound more comforting.
However, the amount of actual revenue of the manufacturer was still higher than the one predicted by the research firm Trefis few days ago. Experts expect that revenues for Nvidia in the third quarter will be slightly below $3,10 billion, and only 84% of this amount, the company will receive for the sale of graphics processors.
However, the graphics card company that continues to be used in new equipment. So in October, the Japanese manufacturer ASIC miners GMO Internet Group has introduced a software device for mining cryptocurrency zcash for (ZEC) on the Nvidia GPU.