Morgan Stanley said - bitcoin mining industry tends to be saturated, is that so?
On November 9, Morgan Stanley released an investment study that said it would maintain its Nvidia "overweight" rating, reduce its target share price from $273 to $260, and cut its third-quarter performance expectations for Nvidia.
The report mentions that revenue from Nvidia graphics processors increased dramatically once, driven by the digging industry of digitally encrypted currencies. But now, the relative shortage of resources is over. Analyst Joseph Moore (Joseph Moore) believes that for Nvidia, this is a trend against the wind.
The report also points out that the declining demand for Nvidia products in China and the unexpected demand for Turing products in Nvidia's new GPU architecture are all unfavorable factors for Nvidia.
NVIDIA's mining business
On May 10 this year, NASDAQ: NVDA announced its first quarter results after the closing of the U.S. stock market. The results showed that as of April 29, 2018, its first quarter revenue was $3.207 billion, up 66% from $1.937 billion in the same period last year, and its net profit was $1.244 billion. The US dollar increased by 145% compared with 507 million US dollars in the same period last year.
Invida pointed out that as of the end of April in the first quarter, 289 million US dollars in operating income was related to the mining of encrypted digital currency.
Invida said that by selling processors to digitally encrypted currency mines, Far Supermarket expects $200 million in revenue.
The company expects revenue from its digitally encrypted currency business to decline by about two-thirds in the second quarter. "Digital Encryption Money Mine bought a large number of graphics processors in the first quarter, which pushed up the price of products. In view of this, I think many gamers have not bought new GeForce graphics cards.
In any case, the mining business has played a crucial role in NVIDIA.
Bitcoin mining industry tends to saturation is reliable?
Following the release of the RTX series of new game chips on August 22, Chief Financial Officer Colette Kress announced that NVIDIA plans to suspend and withdraw from the encrypted currency business.
The most important reason is the impact of the encrypted money industry.
Prior to that, according to the second quarter earnings data released by Invida, the stock price fell by nearly 5% in the trading period after the opening of the market. The earnings showed revenue of $3.12 billion and net profit of $1.101 billion. Both revenue and net profit exceeded market expectations, increasing by 40% and 89% year on year, but the decline was very significant compared with the previous period.
In addition, according to Nvida's projections, revenue in the third quarter may not be as good as expected, coupled with the recent downturn in the digital currency market, which has led to a decline in demand for miners. In the earnings data, the revenue of encrypted currency chips is only 18 million, which is less than the expected $100 million. The earnings data is down 3% from the first quarter, and the net profit growth rate in the second quarter is down sharply from 145.4% in the last quarter.
According to 31QU observation, since March this year, the whole encrypted money market has gradually entered a bear market. As of November 9, almost all encrypted currencies have plunged by 70%, even broken and run. Under such circumstances, the money mining business will inevitably encounter the cold winter.
On November 8, the latest two mining machines, S15 and T15, were sold out for about 50 minutes, but according to 31QU, the miners'desire to replace new machines was not strong. In addition, media analysis said that the yields of the two machines were not higher than S9, which confirmed that the mining machine business was not booming. .
In other words, even if Yingweida chips research and development enterprises have withdrawn from the encrypted currency industry, as long as the bull market returns, it is difficult to guarantee that such enterprises will not come back. After all, the encrypted currency mining is indeed a profitable business.