Nvidia Stock Falls 5% as Demand for Crypto-Related Chips Dries Up

Nvidia shares fell as much as 5.6% in after-hours trading Thursday after the company warned that demand for its cryptocurrency-related chips is drying up.

Nvidia has been one of the hottest technology stocks in recent years because of surging demand for its high-powered graphics chips, which are used in data centers and to power crypto mining operations. Since the beginning of 2016, Nvidia shares have risen 769%, compared with a 48% rise in the S&P 500 Index.

While Nvidia reported second-quarter revenue growth of 40% to $3.1 billion and GAAP net income of $1.76 a share—both above Wall Street’s expectations—the company forecast revenue between $3.19 billion and $3.32 billion, below the consensus estimate of $3.34 billion.

“Our revenue outlook had anticipated cryptocurrency-specific products declining to approximately $100 million, while actual crypto-specific product revenue was $18 million,” Nvidia CFO Colette Kress said in a statement. “Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward.”

Other areas of the company’s business remain strong. Nvidia’s data center chips—which are used to power cloud operations at Amazon, Microsoft, and Google—grew by 83% year-over-year to $760 million, above analyst estimates of $744 million.

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Stella Densmore