Nvidia has announced its earnings for the second quarter of the 2020 financial year, and it appears that the graphics giant is still feeling the effects of cryptocurrency deaths, with revenue falling by 17%.
A few years ago, the cryptocurrency craze was in full swing, with people able to make decent amounts of money using their graphics cards to 'mine' for cryptocurrencies like Bitcoin and Ethereum.
This led to a surge in graphics card sales, with Nvidia (and AMD in particular) enjoying spectacular results (despite shortages in stock).
The immense popularity of cryptocurrency has gone on forever, and when it has become harder to make money, sales for graphics cards have dropped off sharply.
This was a big blow to Nvidia's revenues, and as its recent results show, it continues to be impacted. However, while on paper these results look great, they actually beat analyst expectations, with $ 2.58 billion (compared to $ 2.54 billion). This news helped Nvidia's stock rise by 7%.
Strength and gaming
According to the results, Nvidia's gaming products remain its largest revenue driver, bringing in $ 1.31 billion, compared to $ 1 billion last quarter, and still accounts for over 50% of Nvidia's total revenue.
While it was up compared to the last quarter, gaming revenue was actually down from $ 1.8 billion a year ago, again highlighting how much the end of the cryptocurrency craze is impacting Nvidia.
So while things look bad, it at least seems like Nvidia has turned a corner, once again thanks to its gaming division.
“Essentially our business is normalized,” Nvidia's chief financial officer Colette Kress said. An increase in gaming laptops sales using Nvidia tech, as well as the success of Nintendo's Switch console (which uses Nvidia graphics) and the announcement of Switch Lite, all point to a rosier future.
While 'returning to normal' is the most exciting of results, in these uncertain times – and with a possible US / China trade war looming – that seems to be good enough for Nvidia.