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GPU Sales Under Threat: Crypto Slump Forces Nvidia To Lower Q4 Projections

Nvidia, the rather well-known computer hardware manufacturing company based out of Taiwan, has had to adjust its projections for the fourth quarter (Q4) of the financial year 2019, owing to the recent slump in the crypto market. Clearly, the crypto bear market has had greater ramifications than those within the market itself.

The company is now looking at a lowered down forecast because of a projected fall in the sales in its data centre and gaming platforms. This sale usually comes from the “excess mid-range channel called inventory” that came right after the crypto prices started to collapse.

Earlier, the revenue for the fourth quarter period was expected to be $2.70 billion. However, now, after factoring in the readjustment, the revenue is estimated to be around a $2.20 billion. These statistics were communicated to the public via a press release on the 28th of January, 2019.

Earlier, when the crypto market was hot and new crypto miners were jumping onto the bandwagon right, left and center, Nvidia had come quite well in terms of selling GPUs (graphics process units).

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If you know anything about mining, you would know that it is absolutely imperative to own GPU to be able to mine a crypto coin like Bitcoin or Litecoin. Hence, it is easy to see why the managed to amp up its GPU sales when the crypto market was doing well.

However, soon, after the dream run of December 2017 (for the crypto market), GPU demand began to fall alongside the crypto prices. This is because the GPUs remained expensive even though what they helped to mine were having decreasing value. Jensen Huang, the CEO and founder of the Nvidia company called this the “crypto hangover” affecting his business.

According to what the press release tells us, Huang himself made the following statement:

“Q4 was an extraordinary, unusually turbulent, and disappointing quarter.”

Besides the fact that the business coming from the crypto enthusiasts began to fade away, Nvidia also suffered as a result of what they call “deteriorating conditions” in the China market.

n addition to a lack of crypto-related business, Nvidia also cites “deteriorating conditions” in China as a indicator of lower-than-expected revenue from gaming GPU sales in Q4.

Despite the projected setback, Huang said:

“The foundation of our business is strong and more evident than ever – the accelerated computing model NVIDIA pioneered is the best path forward to serve the world’s insatiable computing needs.  The markets we are creating – gaming, design, HPC, AI and autonomous vehicles – are important, growing and will be very large. We have excellent strategic positions in all of them.”