Nvidia's mining chip sales fall 30% in the fourth quarter due to "post-cryptographic excess"

Nvidia managed to survive the downturn in demand for crypto-currency mining chips and recorded total sales of $ 11.72 billion in a full year. The company expects an aggressive rebound for the 2020 fiscal year, but Wall Street badysts believe that these forecasts are too optimistic given the lack of significant change in the market.

Sale of cryptocurrency chips

The American manufacturer of gaming equipment released Thursday its report on the annual results for the year 2019 (ended January 27, 2019). According to the report, the company's total revenue for the year is $ 11.72 billion, an increase of 21% over the previous year.

Despite overall earnings growth, Nvidia announces a disappointing quarter, with profits down more than 30% from the third quarter. This decrease is due in large part to a decrease in the demand for computer chips by cryptocurrency miners.

In the mid-2018s, miners seemed relatively unaffected by the protracted bear market that took hold of the rest of the cryptocurrency arena. However, in the third quarter of 2018, it became clear that the miners were beginning to meet their needs.

Back in May, Bitcoinist said they expect a 67% decline in the sale of graphics cards used by cryptocurrency miners. The fall in the price of bitcoin in mid-November 2018, which almost cost BTC nearly $ 3,000, also exacerbated the situation because of the number of miners forced to shut down their platforms.

Jensen Huang, CEO of Nvidia, commented on fourth quarter performance:

It was a hectic time close to what had been a good year. The combination of surplus stocks of post-cryptographic channels and the recent deterioration in end-market conditions led to a disappointing quarter.

Wall Street says future rebounds are unlikely

To rebadure investors, Nvidia has released a forecast based on an aggressive rebound in demand, but Wall Street badysts do not share the same point of view. According to badysts such as Gene Munster of Loup Ventures, Nvidia's projections do not seem realistic.

Talk to ReutersMr. Munster estimated that the forecast growth of 35% of the turnover from one year to the next for fiscal year 2020 badumes a similar boom to that of the cryptocurrency market of 2017 .

The confrontation of trade between the United States and China has not been resolved and no significant upward movement of the virtual currency market, badysts believe that the demand of minors should not increase so soon.

Are you planning a scenario in which demand for cryptocurrency mining chips would reverse in 2019? Let us know your thoughts in the comments below.

Image courtesy of Nvidia, Shutterstock