A press release from Jan 28 reported that Taiwan based computer hardware company, Nvidia, updated financial estimates for Q4 for the 2019 fiscal year.
The company is forecasting weaker sales in its gaming and data center platforms coming from excess mid-range channel inventory precipitated by the downturn in crypto prices. According to a statement released by Nvidia, Q4 revenue is expected to be $2.20 Billion shrinking down from the previous projection of $2.70 Billion.
The crypto euphoria and craze of 2017 had driven up demand for Nvidia’s graphics processing units (GPUs) through the roof. Once what some economists term as “irrational exuberance” on the part of investors died down and the prices fell, demand for Nvidia’s GPUs began to fade. The prices of the GPUs did not go down far enough as the crypto prices fell, to sustain steady demand from customers. This led to Nvidia’s founder and CEO Jensen Huang, terming the situation a “crypto hangover”
Nvidia’s founder and CEO Jensen Huang also said in a press release, Q4 was an extraordinary, unusually turbulent, and disappointing quarter” in addition to a shortage of crypto business, the Nvidia boss also cited “deteriorating conditions” in China as a possible indicator of a lower than expected revenue forecast from gaming GPU sales in Q4.
Nvidia’s stock price had taken a hit at the end of 2018 after massive short orders were taken by investors. The mass shorts sunk the stock price by 54 percent as had been previously reported by crypto publication Cointelegraph. Recently released news of a decrease in revenues has further sunk the stock price by 15 percent to around $135 down from $158.08.
A look at the markets tells a tale of the markets taking a further beating with many major coins seeing significant losses. Bitcoin cash (BCH), Bitcoin SV, and Stellar (XLM) are all seeing losses of over 10 percent as at press time.
A further dip of the markets could mean worse news for Nvidia as demand for their Graphics processing units (GPUs) is likely to suffer more. Their stock price will suffer even more too, all this remains to be seen though.