![]() ![]() In an interview with Barron’s, Nvidia Chief Financial Officer Colette Kress says the company is “unable to quantify” the negative demand impact from crypto miners and the eventual Ethereum proof-of-stake transition. A more efficient design will enable AMD to gain a manufacturing cost advantage over Nvidia. None of a half-dozen notes from Nvidia analysts I read this week mentioned AMD as a threat, despite the fact that AMD has gone on record that its coming lineup of cards, code-named RDNA 3, will offer more than a 50% improvement in performance-per-watt versus the prior generation. A new era of competition from AMD might be the biggest unappreciated risk for Nvidia. (AMD) next-generation graphics cards, expected later this year, will be more price competitive and gain share thanks to its innovative “chiplet” architecture. Veteran industry analyst Jon Peddie, who presciently told Barron’s in April that demand for higher-priced cards would disappear, remains adamant that Nvidia’s elevated pricing is unsustainable. Pricing and demand will need to come down to a normal non-crypto-driven level of $800 and below, hurting its profit margins. ![]() During the past couple of years, the company feasted on unprecedented demand for higher-priced cards that sold for $1,200 to $2,000, driven by the crypto boom. Second, Nvidia’s profitability may get crunched as pricing falls to more normal levels. Wedbush estimates that Ethereum mining may have accounted for $800 million of the company’s quarterly revenue over the past year and half, totaling about $4.8 billion. As we have warned, when that occurs, billions of dollars of Nvidia cards may flood used marketplaces, creating a glut. While mining demand has already sputtered this year as digital-currency prices have fallen, the biggest shoe still hasn’t dropped.Įthereum is expected to migrate as soon as September from a so-called proof-of-work model to proof-of-stake, negating the need for graphics card-based mining. To recap, Nvidia’s gaming cards have been used primarily to mine Ethereum, the second-largest cryptocurrency by market capitalization. First, the negative aftereffects of the crypto bust are ongoing. ![]() They now believe financial earnings estimates have been fully derisked, predicting that new Nividia products, expected to launch soon, will boost its performance.īut the bulls are overlooking a number of significant risks. The same analysts who had a Buy rating on Nvidia shares during its drop this year aren’t giving up yet. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |