Colette Kress, Nvidia’s chief financial officer, says that the company was unable to predict how reduced crypto mining demand would impact its Q2 results. This result fell short of analysts expectations on Wednesday.
The financial results of the chip giant were released for the three months ended July. 31y showed a 19% quarter on quarter drop in revenue to $6.5Billion, while net income dropped 59% to $656M.
Nvidia blamed “challenging markets” for the decline in gaming revenue, which includes high-end GPU sales, of 44% to $2.04 Billion.
Kress also serves as the executive vice president of Nvidia. He said that Nvidia does not have a clear view on how the crypto market impacts the demand for its gaming products.
“Our GPUs can mine cryptocurrency, but we don’t know how this affects our overall GPU demand.”
She added that “we are unable to accurately quantify how reduced cryptocurrency mining contributed towards the decline in Gaming demand.”
The chip giant’s graphics processing units (GPUs), were originally designed for gaming, but the high demand for crypto mining has led to a 320% rise in the share price of the company over the past five years.
Kress stated that in the past, falling crypto prices and changes to the consensus mechanism have impacted the demand for its products as well as the ability to estimate it.
Volatility in the cryptocurrency markets – such as drops in cryptocurrency prices or changes to the method of verifying transactions including proof of work and proof of stake – has had an impact on, and will continue to have an impact on, our ability and ability accurately estimate the demand for our products.
The Ethereum Merge, scheduled for Sep. 15, could see a further drop in demand for crypto mining hardware. This could be a problem for cryptocurrency mining products like Nvidia’s CMP170HX, which currently costs $4,695.
Related: Nvidia will pay $5.5M in a SEC case regarding ‘inadequate disclosures’ around crypto mining
Despite this, cryptocurrencies like Bitcoin, Litecoin and Monero are still using proof-of-work consensus mechanism networks with no plans to transition.
Nvidia’s share prices have also fallen 5.89% in the past 5 days on NASDAQ.
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