Jensen Huang, Founder, and CEO of Nvidia declared “excess GPU inventory” which followed the mining craze. The most likely reason behind the slump is the high product prices, which Huang stated that will be corrected to suit miners' budgets.
The high demand in the past couple of years favored Nvidia’s card price, but now the demand has decreased significantly. Miners tend to invest in cheaper mining cards and gear, and Nvidia’s pricing strategy doesn’t correspond to the trend.
Huang compared the situation to a crypto “hangover”, which he believes continued longer than the market expected.
Nvidia’s Q3 report shows an overall increase to $70 million in Q3, expanding more than triple over the past nine months to $214 million. Margins dropped by 1.8 percent to 60.4 percent, following $57 million in charges from the previous generation of chips.
Nvidia’s missed sales in Q3 led to market shares dropping more than 16 percent.
The company’s overall revenue in Q3 marked $3.2 billion, increasing 20 percent from the $2,64 billion last year. Nvidia predicted the $3.2 billion mark in August. The company did not expect significant sales in the crypto mining scene and blockchain-related businesses.
The report is published at the same time when Coinbase’s CTO Balaji Srinivasan remains with a bullish stance on crypto mining. According to Srinivasan, ASIC mining rigs dominate cryptocurrency mining, thus, making it extremely difficult for GPU miners to sustain profitability.
GPU mining on the Ethereum network, for example, slumped from $150 in 2017 to $0 in November 2018. The slump is most probably caused by the double-up of Ethereum’s hashrate and the increased number of EthHash ASIC mining machines in operation.