Nvidia CFO Collette Kress has faulted the sharp drop in the demand for the graphics card as a reason for the sharp fall in the company’s revenue in Q2. The executive also mentioned that the company has not been able to estimate the fall in demand for mining as the results were way below what was projected by analysts. Kress also mentioned that there had been a diverse shift in consensus mechanisms, among other issues that the company has not been able to predict.
The CFO says the company faced challenges in the market
The company released its earnings for the last three months, which ended in July, revealing a 19% drop in the quarter-on-quarter. Asides from that fall, the company’s net income also took a massive beating, falling by 59% to register an income of $656 million. Gaming revenues were also unchanged as they took a beating of about 44% from the amount registered in Q1 to bring in a revenue of $2.04 billion. Aside from making mining chips, the company also produces high-end GPUs for gamers worldwide. According to the Nvidia CFO, these results have resulted from the different challenging experiences the company has had to contend with in the market.
Purchases of Nvidia GPUs are declining
According to the Nvidia CFO, although their GPUs can mine digital assets, the company does not see how the current condition in the market affects the demand for their products. Furthermore, she mentioned that the company could not specifically describe how limited mining transcribes into reduced demand for a product initially made for gamers. Although the company released the parts for gamers, records show that there has been over a 300% increase in the company’s revenue in the last few years due to patronage from crypto companies.
However, the CFO also noted that the purchase of their products had been grossly affected by networks switching from one consensus mechanism to another. With Ethereum eyeing a switch in the coming years, there have been projections of a decline in the purchase of mining hardware. With this, the company might be in deep waters soon as most gamers would not be looking to purchase its CMP170 HX, which the company values at a little above $4,500. Some other networks, such as Bitcoin, are still active in the mining scene, and with no plans to change in the future, the company might be hanging on to that for succor.