NVIDIA Reports 68% YoY Revenue Increase... Cryptocurrency Mining Chips Fall Short of Expectations

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Nvidia, the world's largest graphics processing unit (GPU) company based in the United States, posted earnings that exceeded market expectations in the second quarter, driven by a surge in GPU sales.

According to CNBC and The Wall Street Journal (WSJ) on the 18th (local time), Nvidia announced that it recorded $6.51 billion (approximately 7.6 trillion KRW) in revenue for the second quarter. This surpassed the average market forecast of $6.33 billion (approximately 7.4 trillion KRW).

This represents a 68% increase compared to the same period last year ($3.866 billion).

Operating profit also surged 275% to $2.444 billion (approximately 2.86 trillion KRW) from $651 million in the previous year.

The strong performance was mainly due to the continued global semiconductor supply shortage alongside sustained demand for Nvidia’s core product, the GPU. In particular, following the COVID-19 pandemic, the increase in remote work and longer time spent at home significantly boosted demand for PC gaming and data centers, leading to a sharp rise in GPU sales for these devices.

Supported by strong sales of its flagship gaming chips, Nvidia generated about half of its total revenue in the second quarter ($3 billion) from its gaming chip business, marking an 85% increase compared to the same period last year.

According to Nvidia, increased sales of major gaming consoles such as the Nintendo Switch drove the growth in gaming chip revenue.

However, Nvidia expects that the semiconductor supply shortage will impact gaming chip sales in the second half of the year.

Additionally, Nvidia has expanded its GPU-related technology beyond its traditional gaming chip business into artificial intelligence computing, data centers, and autonomous vehicle sectors.

As a result of this business expansion strategy, revenue from the computing and networking segment, which includes data center chips, rose 46% year-over-year to $2.6 billion (approximately 3 trillion KRW).

Notably, the data center business achieved record-high performance. Nvidia posted $2.37 billion (approximately 2.7 trillion KRW) in revenue from the data center segment alone, a 35% increase compared to the same period last year.

However, Nvidia’s revenue from cryptocurrency mining chips was $266 million (approximately 311 billion KRW), 33% lower than market expectations.

GPUs, known for their superior computational power, have been primarily used for cryptocurrency mining equipment. Nvidia, a dominant player in the GPU industry, had recorded strong earnings earlier this year due to a surge in mining activity driven by a rapid rise in cryptocurrency prices.

But as cryptocurrency prices plunged again, sales of related GPUs were negatively affected.

Nvidia forecasts third-quarter revenue to reach $6.8 billion, exceeding the market expectation of $6.5 billion.

Meanwhile, the market responded positively to the strong earnings announcement. Nvidia’s stock price rose 2.22% to $194.62 in after-hours trading following the close of the Nasdaq market at 5:40 PM local time on the same day.

This content was produced with the assistance of AI translation services.