Nvidia stock price fell amid a collapse of the cryptocurrency market and declining interest in mining
This week, Nvidia shares have fallen seriously . During the trading session on Thursday, November 15, the collapse was 17%. The reason was the report on financial results for the third quarter of the year - the company earned significantly less than expected.
Nvidia specializes in manufacturing hardware for gaming consoles, as well as video cards are popular among the miners of cryptocurrencies.
However, over the past year, the price of Bitcoin has more than doubled after a significant increase in 2017. Reducing the cost of the most popular cryptocurrency struck the cryptographic market as a whole. In particular, interest in mining has declined - many miners sell their video cards, which increases the supply on the market. As a result, the number of Nvidia video cards produced, but not sold, is growing.
“The hangover after the rapid growth of cryptocurrency lasted longer than we expected,” said the head of the company Ren-Sun Juan (Jensen Huang).
At the moment, the price of Bitcoin is experiencing another fall and is at its minimum values for the year. Against this background, Nvidia expects revenue of no more than $ 2.7 billion in the next quarter, while analysts initially predicted revenues of $ 3.4 billion.
Not only Nvidia
Nvidia is not the only large technology company affected by the collapse of the cryptocurrency market. For example, one of the main competitors of the company, AMD also reported on lower financial results than expected. The company's management also called the decline in sales a negative trend on the crypto market; in the current quarter, financial results will also be below expectations. Against the background of reporting, the stock price of AMD also declined this week.
The current week as a whole was not the most successful for shares of technology companies, and this could also be a negative factor for video card manufacturers. For example, Nintendo shares fell by 9%, and this is one of the main corporate customers of Nvidia. Any hint that Nintendo will buy less hardware can lead to a reduction in the value of Nvidia shares.
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