The recent fourth-quarter NVIDIA earnings report brought out unpredictable results. Nvidia estimates that crypto mining contributed $100 million to $300 million to its gaming segment in Q4 out of their total $5 Billion profits.
NVIDIA in Cryptocurrency
Last year, cryptocurrencies soared to new highs and brought along a renewed mining interest. Mining revolves around using a computer to generate more cryptocurrency.
Even though the NVIDIA GPU is designed for high-end video games, it is still programmable and ideal for cryptocurrencies. Hence, it seems that many commercial miners are starting to adopt the new NVIDIA RTX 30-series GPUs, adding to the enormous demand the company has seen since they announced new processors last fall.
In the past, bitcoin’s price soared to almost $20,000 per bitcoin back in December 2017, rocketing from under $1,000 at the beginning of the year. When the price came crashing down, it dragged NVIDIA’s stock along with it as its GPU sales slowed.
As of now, the management wants to ensure its RTX 30 series GPUs end up in the hands of gamers, not crypto miners. To ensure that, it reduced the hash rate on its RTX 3060 (the cheapest GPU in its 30 series) by half to discourage its use in this fashion.
The rising cryptocurrency mining has led to a shortage of game chips, which Nvidia is trying to solve with the new CMP.
Kress said that cryptocurrencies have recently been adopted by financial companies and institutions and show vital signs of a power struggle. With CMP products, they can better understand cryptocurrency’s contribution to total sales.
The CMPs will ship in March, giving NVIDIA clarity on where their hardware is being used. Kress said CMP had about $50 million in the first quarter, a significant amount for new chips, two-thirds of which will enter the market in the recent quarter.
What Happened to Nvidia’s Automotive Segment?
As per the Q4 report, its automotive segment revenue of $145 million fell by 11% compared to a year ago.
It is important to remember that this segment is experiencing a downturn as the company decided to end its old entertainment business. However, the status of AI and self-management software development is becoming increasingly important.
In an interview, Kress said NVIDIA is expanding its electric vehicle manufacturers’ list to join the NVIDIA DRIVE autonomous vehicle platform. Last year, Mercedes-Benz also signed a large order to expand the use of AI cockpit technology.
Given that the auto segment had sales of just $ 536 million last year, this new business line will be significant. Investors’ patience will pay off here as the technology for electric and autonomous vehicles gradually gains momentum.