On Thursday, Nasdaq-listed GPU manufacturer Nvidia (NVDA) reported record revenue for both the fourth quarter and fiscal 2018. The company focuses primarily on artificial intelligence, machine learning, and gaming – but a surprise source of booming demand has also come via cryptocurrency miners.
In the CFO commentary provided by Nvidia, “strong growth” in sales of “GeForce® gaming GPUs” was attributed in part to cryptocurrency mining. Cards like the GTX 1070 and GTX 1080 Ti have proven a hit amongst the crypto mining community; these constitute part of Nvidia’s latest series of GPUs.
The commentary also revealed a stellar Q4 revenue for the segment that entails mining-optimised graphics cards. Indeed, Nvidia’s OEM & IP quarterly revenue came in at $180 million, and as The Street pointed out, when “excluding $66 million in revenue from an Intel licensing deal that expired in March 2017, the segment’s sales grew 64%” compared to the corresponding quarter in FY2017.
Following their quarterly update, the stock price of Nvidia rose by almost 10 percent; no easy feat for a company valued at over $100+ billion. More importantly, these gains remained in tact, despite the U.S. stock market having plummeted again on Thursday, after doing so just days beforehand.
Given the unnerving volatility in prices of crypto assets, chief executive Jensen Huang – who co-founded the company in 1993 – was understandably conservative when discussing Nvidia’s strong sales in the area yesterday:
Clearly, there’s a lot of talk about crypto. And crypto was a real part of our business this past quarter, even though small, overall.”
Another reason why Huang may not be getting too carried away with these booming sales figures is due to the ever-increasing volume of mining being conducted by ASICs. These are the hardware rigs often found in the industrial sized mining farms located in countries like China and Iceland. The uptake of ASICs dramatically raised mining difficulty for some coins, making the activity no longer economically feasible for CPU and GPU-based miners alike.
Exemplifying this large-scale shift to ASICs has been coins that are mined using the SHA-256 algorithm, such as Bitcoin and Bitcoin Cash. Other mining algorithms like Ethash (Ethereum) and Equihash (Zcash, Bitcoin Gold) have since been designed to resist ASIC mining, hence why GPU mining (and sales for Nvidia) remains a popular venture, for now.
Just recently, Nvidia took to recommending that their trading partners impose limits on the amount of GPUs that could be purchased per transaction. Prompting this was a frustrated gaming community (Nvidia’s target audience), who were struggling to find a retailer with available stock. This came despite Nvidia already having raised prices, which ironically was decided upon with the intention to quell the seemingly insatiable demand from miners.
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