Nvidia Cites Decline in Crypto Miner Demand in Missed Profit Target

Nvidia has some depressing news for investors, but this time, the crypto mining slump was not the sole reason.

Graphics card manufacturer Nvidia said in updated guidance published on Monday that it now expects to report only $2.2 billion of profit for its fiscal 2019 fourth quarter, which ends January 31. This is lower than the previous estimate of $2.7 billion.

Nvidia said that the previous forecast had already considered the decrease in demand for graphics processing units (GPUs) used for crypto mining. The sales of the extra graphics card have kept up with those anticipations.

In a letter to shareholders, Nvidia CEO Jensen Huang wrote, “Exiting Q3, we estimated channel inventory would be largely depleted within one to two quarters, or between February and April,” adding that, “Our view of that today remains unchanged.” 

The main dilemma is that economic uncertainty and woes, predominantly in China, hurt the demand for GPUs among Nvidia’s other clients—data centers and gamers.

Huang said, “Q4 was an extraordinary, unusually turbulent, and disappointing quarter.”

Nvidia will publish its complete fourth-quarter results on February 14.

The firm has been issuing a warning for some time now because of the “substantial decline” in cryptocurrency miner revenue.

Nvidia expected to gain $100 million in the second quarter of fiscal 2019 but only had $18 million.

Chief financial officer Collete Kress underscored, “Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”

On the other hand, competitor AMD had also warned that the decrease in miners’ demand for GPUs would impact its GPU business.