Nvidia claims cryptocurrency miners are buying far fewer graphics cards

Morgan Stanley Previews Semi Earnings Expects Strong Nvidia Results Despite Crypto Concerns

Nvidia's fast-growing data center business rose 71 percent to $701 million in the quarter, but missed analysts' estimate of $703 million.

Another big surprise is the OEM & IP department, reporting a revenue of United States $387 million, up by staggering 148 percent compared to the same quarter a year ago and 115 percent compared to the previous quarter.

Nvidia shares are down 2.5% premarket. On Thursday, Nvidia notched an all-time high of 260.50. It is also a ten percent spike compared to Nvidia's last quarter, in which it generated $2.91 billion in revenue. That raises concerns with investors that Nvidia's $1.723 billion in gaming sales may suffer from the cryptocurrency downturn as well.

Nvidia is feeling the slowdown in cryptocurrency market and a general slowdown in consumer shopping, so revenue from gaming department is actually 1 percent lower compared to the last quarter, but still up by 68 percent compared to the same quarter a year ago. Crypto sales will probably fall by about two-thirds in the current fiscal quarter, the company said. Susquehanna analyst Christopher Rolland had anticipated the figure to be much lower, of about $200 million.

The results also came with a warning: Sales of graphics cards to cryptocurrency miners, which was a significant contributor in the both revenue and average selling price, are likely to drop with Nvidia predicting a loss in demand of two-thirds for the next quarter - good news for gamers, who may see an end to stock shortages and sky-high pricing, but not so healthy for Nvidia's bottom line. "Our datacenter business achieved another record and gaming remained strong".

"The crypto thing is no longer a relevant bear theme", Mosesmann said in a note to clients. According to the report, the company made $289 Million - 9% of their total revenue - from sales to cryptocurrency miners.

Needham analyst Rajvindra Gill maintained his buy rating and upped his price target to 325 from 300.

Mosesmann reiterated his buy rating on Nvidia and raised his price target to 315 from 300. Gill expects data-center and autonomous-driving markets to continue to provide robust growth.

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