Why NVIDIA May Not Be Worried about Crypto Mining Decline
NVIDIA beats earnings and revenue estimates
Chipmaker NVIDIA (NVDA) reported its fiscal first-quarter 2019 (ended in April) numbers on May 11, beating earnings and revenue estimates. The California-based company’s stock surged 20% between April 25 and May 10 due to lofty expectations. It fell 2.2% on Friday as investors booked profit.
NVIDIA generated revenue of $3.2 billion in the first quarter of fiscal 2019, marking a whopping 65.5% rise YoY (year-over-year) and beating analysts’ estimate of $2.9 billion. The chipmaker’s net income rose YoY to $1.2 billion from $507 million, and it reported adjusted earnings per share of $2.05, beating analysts’ estimate of $1.46.
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Strong guidance despite expected revenue decline
NVIDIA has benefited from robust growth in AI (artificial intelligence) demand, as traditional computing demand declines. In the first quarter of fiscal 2019, the company’ gaming revenue rose 68% YoY to $1.7 billion, and its data-center revenue soared 71% YoY to $701 million.
The company said that whereas it generated revenue of $289 million from chips for cryptocurrency mining, it expects sales to fall by two-thirds next quarter. However, this is not much of a worry, as cryptocurrencies make up less than 10% of the company’s total revenue.
NVIDIA expects $3.04 billion–$3.16 billion in revenue in the next fiscal quarter, despite the expected decline in crypto revenue. Analysts expected revenue guidance of ~$2.95 billion.