Semiconductor defect. Intense interest in cryptocurrency. Record annual income and profit.
That all feels familiar to Nvidia Corp. NVDA,
which went to records in 2018 amid chip shortage and demand from cryptocurrency miners, before falling back to earth with a thud in 2019. With stellar 2020 that surpassed the 2018 record performance, thanks to some of the same dynamics, it’s fair to wonder if Nvidia is once again going to end a period of massive demand with a glut of oversupply.
Chief Financial Officer Colette Kress tried to allay those fears on Wednesday.
“The market feels very different than it did before,” Kress said in an interview with MarketWatch after the chip designer posted more than $ 5 billion in quarterly revenue for the first time. hour.
Kress said Nvidia is better prepared for a potential increase in demand from crypto miners, as it now offers a special graphics card designed just for crypto mining. Last week, it introduced a special card and chipset for crypto-miners, and revealed features for its upcoming RTX 3060 card designed for video conferencing that would slow down the the system if the cards were used to mine digital money.
“The industry is developing,” Kress said, referring to the cryptocurrency market, adding that more businesses are starting to embrace it. She also noted that, in Nvidia ‘s case, “there is an installed base of similarly mined crypto miners that have just been restarted or entered the full market to mine. ”
She predicts that sales for her cryptocurrency mining processor, or CMP, will be around $ 50 million in the current quarter. CMP is designed to mine for ETHUSD ethereum,
digital currency much lower than bitcoin BTCUSD,
There are more concerns outside of crypto application, however. Nvidia has struggled to deliver enough results amid a continuing shortage of semiconductors that prompted President Joe Biden to sign an action order earlier in the day, leading a review across organizations to address the vulnerabilities in the supply chains.
For more: Chip shortage is expected to continue worldwide into next year, which is good news for semiconductor stocks
The shortages, coupled with memory of the crypto overdraft were killing the financial results of both Nvidia and Advanced Micro Devices Inc. AMD,
two years ago, investors were a little worried, and Nvidia shares fell more than 2% in after-hours trading.
Executives reaffirmed that they are doing what they can to provide customers while avoiding over-mobility at the heart of the 2019 affairs. saw revenue rise 97% in the quarter, Kress said Nvidia data center customers should communicate with the company about their needs and design, and that shouldn’t be an issue being there to get supplies.
“We plan for growth and plan for demand as we go forward,” Kress said. “We tend to be limited by supply for some time.”
Nvidia had a remarkable 2020, and its connection to crypto should be seen as a positive thing by investors as more companies accept bitcoin and receive a reward from Wall Street, from Square Inc. SQ,
to Tesla Inc. TSLA,
Investors need to hope that Nvidia officials learned their lesson last time and make the right moves to manage supply and demand issues this time around.