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What Caused Nvidia’s Shortfall? Gamers or Crypto Mining?

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Nvidia has been hurt by fading pandemic-era demand for gaming graphics cards.

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warned on Monday that shortfalls in its gaming segment revenue would hamper second-quarter results. Analysts were left wondering how much can be blamed by a drop in demand from gamers, compared with cryptocurrency miners.

The company said its preliminary second-quarter revenue was $6.7 billion, well below its outlook for $8.1 billion. The firm pointed to a 44% quarter-over-quarter decline in gaming segment revenue to $2.04 billion.

“Our gaming product sell-through projections declined significantly as the quarter progressed,” CEO Jensen Huang said. “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory.”

Barron’s warned in April that


stock could suffer as pandemic-era demand for gaming graphics cards faded, especially if crypto miners looked to unload high-end cards as they prep for the Ethereum blockchain network’s migration to a “proof-of-stake” model from “proof-of-work.” The transition, which hasn’t yet happened, would mean graphics cards are no longer needed for ether mining. Industry observers have noticed an uptick in promotions for high-end graphics cards that were once excessively marked up and sold well above MSRP.

news release, which the company declined to comment beyond, didn’t mention a pullback in demand from cryptocurrency miners, but Raymond James analyst…


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