NVIDIA: Our crypto business is dead and it's never coming back

NvidiaNvidia CEO Jensen Huang.
  • Nvidia warned on its second-quarter conference call that it won’t make money from cryptocurrency going forward.
  • Nvidia’s actual crypto-specific revenue was lower than expected.
  • The chipmaker cut its revenue guidance for the third quarter.
  • Watch Nvidia trade in real time here.

Nvidia‘s crypto business is dead and it’s never coming back, the chipmaker said on its second-quarter earnings call.

“We believe we’ve reached a normal period as we’re looking forward to essentially no cryptocurrency as we move forward,” Nvidia CFO Colette said.

“Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $US100 million, while actual crypto-specific product revenue was $US18 million, and we now expect a negligible contribution going forward.”

The writing of a crypto slowdown had been on the wall for quite some time. In May, Nvidia warned investors that a steep decline in prices, coupled with a potential shift in ethereum’s mining rules, would bring an end to the its crypto boom.

And in July, Nvidia competitor AMD said on its second-quarter earnings call that it expects the impact from crypto to fall to nearly zero in the third quarter.

Following Thursday’s closing bell, Nvidia announced second-quarter earnings of $US1.94 a share on revenue of $US3.12 billion. Wall Street analysts surveyed by Bloomberg had expected earnings of $US1.85 a share and revenue of $US3.11 billion.

Nvidia cut its guidance for the next quarter and now sees its revenue to be within 2% of $US3.25 billion versus its previous estimate of $US3.34 billion.

“Even with the weaker outlook, sales are growing 23% y/y, just as the sustainable revenue streams are beating consensus,” SunTrust analyst William Stein said in a note sent out to clients after the results. Stein has a target price of $US316 and maintains “buy” rating for Nvidia.

Shares of Nvidia slid about 2% on Thursday on trading and are up 25% since the start of this year.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.