Several reports over the past week have suggested that the stock price of Nvidia has dropped due to a drop in demand for crypto mining.
Fool.com’s report, for instance, read:
NVIDIA’s revenue growth is expected to drop into the single digits this quarter. The reason: weak demand for graphics cards. Cryptocurrency mining was a key catalyst for graphics card sales and pricing.
However, as many analysts have suggested, Nvidia’s decline in stock price and revenues is likely not related to crypto or the performance of the digital asset market.
Already Priced in During 3rd Quarter
In August, Nvidia CFO Colette Kress told its investors to not expect any contribution from its crypto venture, in a quarter three earnings call.
At the time, the CFO said:
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.
When the executive released the statement in regard to the struggle of the company’s cryptocurrency mining equipment manufacturing business, the stock price of Nvidia fell by over five percent during a period in which stocks in U.S. markets were still rising at a rapid rate.
Even in November, after Kress first stated that the cryptocurrency mining-focused GPUs the firm manufactured weren’t appealing to the mainstream, analysts including Jim Cramer said that the stock price of Nvidia was likely impacted by increasing competition in the gaming chip space with the rise of AMD.