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Nvidia's upbeat forecast reveals that company gaining traction from Cryptocurrency mining

Feb 09, 2018 Posted /  1787 Views

Nvidia's upbeat forecast reveals that company gaining traction from Cryptocurrency mining

Nvidia Corp's upbeat has revealed that its quarterly revenue forecast has acknowledged the surging demand for its graphics card chips used in data centres, gaming devices and cryptocurrency mining. The company shared further that the demand for the chips has sent its share prices surging high as to roughly 12 percent.

The media has been reporting lately that company's quarterly results are very much better than what it was hoping and now it is reaping benefits from its much-acclaimed volta chip architecture which was launched last year. It is noteworthy that volta processors are used an array of technologies which includes artificial intelligence projects and driverless cars. Nvidia's Chief Executive Officer Jensen Huang remarked in a statement that

“Virtually every internet and cloud service provider has embraced our Volta GPUs.”

The foremost and primary use of graphics cards was found for high-end video game who utilized superior and heavy graphics. These chips essentially distribute the processing load of the main chip and make it easier and faster to run high-end applications. However, with steady time the chips started being widely utilized for cryptocurrency mining and other new technologies such as Artificial intelligence and machine learning.

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The profit from Nvidia’s publicly observed data centre business, which is counted as Microsoft Corp’s (MSFT.O) Azure cloud business as its client, more than doubled to $606 million. That pummeled analysts’ average valuation of $541.1 million. Not only this, Nvidia also sells chips to Inc’s (AMZN.O) Amazon Web Services (AWS), which is competing with Microsoft to control data and computing for large-scale businesses.

The rallying growth

It is expected that the data centre would expand in 2018 as well and will witness an outstanding growth. The prediction has been given by Morningstar analyst Abhinav Davuluri. The growth is explained as the demand coming from the cryptocurrency industry and there is a huge rush for the mining chips from Nvidia and rival AMD has already dug deep to provide the high computing ability required for virtual currency mining.

“Strong demand in the cryptocurrency market exceeded our expectations,” Chief Financial Officer Colette Kress said on a conference call.

“While the overall contribution of cryptocurrency to our business remains difficult to quantify, we believe it was a higher percentage of revenue than the prior quarter.”

The company has disclosed in the statement that the inventory levels of its gaming GPUs throughout the quarter was weaker in comparison to the historical channel inventory levels. This was resulting out of the surging demand from cryptocurrency miners. Notably, the price of Bitcoin, the leading and the most popular cryptocurrency, rose more than 1,300 percent in 2017. Prices have dropped this year, however, Bitcoins and altcoins market is witnessing some loyal consumers who believe that the currencies have great future.

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Tags: Cryptocurrency Mining Nvidia gaming devices

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