Nvidia sales rise as the company struggles to keep gaming chips in stock.

 

  • Recently, Nvidia announced graphics chips for miners of cryptocurrency.
  • Gaming graphics chips are in huge demand these days.
  • Nvidia is making huge profits from these chips.

Nvidia Corp’s prediction is better-than-expected fiscal first-quarter profits on Wednesday, with its flagship gaming chips awaited to remain in tight supply for many more months.

As people are waiting for COVID-19 vaccine doses worldwide, stay-at-home orders have kept the market high for chips that speed up video games. Nvidia’s gaming chips have also recaptured popularity for mining cryptocurrency, an inclination Nvidia is trying to counter by offering special mining chips to free up graphics chip stocks gamers during a global chip deficit.

While Nvidia was long recognized for its gaming graphic chips, its competitive push into artificial intelligence chips that supervise tasks such as speech and image identification in data centers has helped it become the most worthy semiconductor maker by market capitalization.

It has defeated rivals Advanced Micro Devices and Intel Corp.

Chief Financial Officer Kress said that a global chip crunch made it hard to keep its flagship gaming chips introduced last fall in stock. The chips would likely remain in huge supply throughout the fiscal first quarter.

C. Kress said that analysts have estimated that cryptocurrency mining contributed between $100 million to $300 million to Nvidia’s sales in the fourth quarter. The company feels that the new mining chips will generate about $50 million in revenue in its fiscal first quarter.

To stop miners from using gaming chips, Nvidia will start shipping software with its gaming chips that slow down their ability to mine some currencies and release a new mining-specific chip. Nvidia Chief Executive Officer J. Huang told recently that the mining chips do not need gaming features such as display outputs, which means that chips that might not be suitable for gaming can be used for mining instead.

“The way miners use the chips, they don’t need a whole bunch of functionality,” Huang said of miners.

The company expects first-quarter revenue of $5.30 billion, plus or minus 2%, above analysts’ average estimate of $4.51 billion.

The quarter’s revenue ended on Jan. 31 rose to $5 billion from $3.11 billion a year earlier. Analysts, on average, were expecting $4.82 billion, according to IBES data from Refinitiv.

According to FactSet data, revenue in the company’s gaming segment was $2.5 billion, above analyst estimates of $2.36 billion. Datacentre revenue was $1.9 billion, above estimates of $1.84 billion, according to FactSet data.

 

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