Nvidia records a 2% loss from last week's 3% gain due to CEO Jensen Huang stating that the earnings from selling processors to cryptocurrency miners are not expected to grow extremely large.
For the fourth quarter of the fiscal year, which ended in December 2020, Nvidia was able to beat the expectations of analysts for both earnings and revenue.
Nvidia on crypto
According to analysts, Nvidia's earnings are $3.10 per share, adjusted compared to $2.81 per share that analysts expected, and the revenue is $5.00 billion compared to $4.82 billion that was expected by analysts Refinity.
Just this week, the company announced new graphics cards made for mining cryptocurrencies like Ethereum, which Nvidia stated would allow it to boost the stock for gamers who wish to have the same cards to run graphically intense video games, according to The Verge.
The company also stated that it plans to sell cryptocurrency-geared cards to industrial miners starting in March. However, CEO Huang stated on the earnings call that he did not think it would be a massive part of the business, as he expected it only to be a small part of their operation.
Nvidia's sales increased up to 61%, and investors had been expecting revenue growth of over 55% from 2020, and the company had beat those expectations despite the global semiconductor shortage.
The company also suggested that its great streak would continue by forecasting $5.3 billion in revenue for the current quarter, ahead of investor expectations of only $4.51 billion.
In recent months, Nvidia's stock has had a lot of momentum, with the stock increasing over 106% in 2020.
The investors see the chipmakers as the main supplier to several new technology trends. It sells semiconductors components for artificial intelligence, gaming, automobiles, and data centers, according to Venture Beat.
There are two primary segments that Nvidia has. First is Graphics, mainly its graphics cards for professionals and consumers, and Compute and Networking, including the chips for automobiles, robots, and data centers.
Nvidia's sales
The company got impressive quarters, partly due to the impact of the coronavirus pandemic. Graphics reported $3.06 billion in revenue, which increased 47% from the same period in 2020. Compute and Networking, the data center division, increased 91% year-over-year to $1.95 billion.
During the height of the pandemic, PC gaming was hot in the market. Nvidia is best known for its graphics cards that let high-performance gaming. The company stated that sales of its newest graphics cards drove its gaming performance.
However, the company has had problems in keeping the new graphics cards in stock. On Feb. 24, Nvidia stated that they are increasing supply, but the inventory will remain low until April.
Unfortunately, the company's automotive business did not perform well during the last three months of 2020. It was down to 11% or $145 million, and in the entire 2020, it concluded to 23%.
According to ZDNet, in September 2020, Nvidia stated that it planned to purchase ARM from Softbank for $40 billion in a transaction with implications for the semiconductor industry.
ARM develops low-level technology used in the industry to create low-power chips for mobile devices, and it also applies technology to most of Nvidia's competitors. Numerous companies are already objecting to the deal through regulatory channels.
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Written by Sieeka Khan
