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Nvidia Just Can't Grab a Break. Revenues up, Profit Nearly Doubles... and Stock Down 20% :
Ongoing Bitcoin woes left the channel holding all the cards, and that's not a good thing
Nvidia has turned in growth in revenue and profit, but has been punished for missing its guidance in the third quarter of its fiscal 2019, all amid a continuing sharp drop in demand from crypto-currency miners.
Its stock fell as much as 20 per cent after it reported on Thursday:
- Revenue of $3.18bn, up 21 per cent year-on-year, during the three months to the end of October.
- Net income of $1.23bn in that quarter, up 47 per cent year-on-year.
- GAAP diluted earnings per share of $1.97, up 48 per cent year-on-year.
Nvidia missed forecasts because of a decline in what was formerly one of its most important growth markets – cryptocurrency mining rigs. With Bitcoin and Ethereum declining in value, big mining rigs are less economic.
As CEO and cofounder Jensen Huang said in the company's media announcement: "Our near-term results reflect excess channel inventory post the crypto-currency boom, which will be corrected."
CFO Colette Kress told analysts on a conference call that GaaP gross margins grew 90 basis points year-on-year, reflecting "our continued shift towards higher-value platforms", but the crypto collapse meant Nvidia suffered a "$57mn charge for prior architecture and chips."
[...] The company's announcement noted that in the last year, there was "a 48 per cent jump over last year in the number of systems using NVIDIA GPU accelerators, climbing to 127, including the fastest in the world, No 1 in the US, No 1 in Europe and No 1 in Japan".
Was nice while it lasted. Now that Bitcoin has dropped from $19,500 to $5,500 over the past 11 months and other cryptocurrencies like Ethereum and Litecoin have seen drops of 80-90%, a one-time bright spot in NVIDIA's revenue stream has passed. How much of an opportunity is this for AMD?
(Score: 2) by ikanreed on Friday November 16 2018, @06:34PM (2 children)
And they latch onto the newest thing.
nVidia was way way way above par/earnings indicated because everyone in stupid finance land was convinced bitcoin was magic and vaguely understood GPUs to be involved. Good fundamentals mean little to the kind of idiot who actually runs our dumb system.
(Score: 0) by Anonymous Coward on Friday November 16 2018, @06:48PM (1 child)
Everything is inflated due to ZIRP, now that its ending the cash is flowing back out to be used as collateral for (less risky) loans. It first comes from the areas that got pumped the most recently, then moves down the line. It is simple as that.
If allowed to continue, it is going to be a great time for the "working class" once real estate becomes cheaper, in turn stores can sell items for cheaper, and prices in general come in line with the wages (that is the last place the ZIRP money trickles).
(Score: 3, Insightful) by ikanreed on Friday November 16 2018, @07:02PM
Also stock buybacks financed by an unwarranted corporate tax-cut. Had to address the risk that there might have been some institutions that weren't over-leveraged to death.
Zero interest was warranted up until maybe 2010. And it only made sense then because we'd done ourselves a way-too-low interest growth right smack into 2007's stupidity.
I'm against any economic policy that posits the ultra-rich are sensible with their money.