The cryptocurrency bust might affect Nvidia’s financials more than the company’s let on. RBC analyst Mitch Steves reportedly warned investors that Nvidia severely underestimated revenues from crypto-related sales between April 2017 and July 2018.
Nvidia reported that it generated $602 million in revenue from sales related to cryptocurrencies and blockchain technologies in that time period. According to Steves, however, that figure should be closer to $1.95 billion. That's a discrepancy of over $1 billion.
Steves is said to have pegged the total crypto-related revenue for that period to be around $2.75 billion. He then estimated that Nvidia captured 75 percent of the market, with AMD getting the rest. That would mean Nvidia made $1.95 billion in that period (at least from crypto), while AMD made about $234 million.
AMD’s guidance supports those figures, with Business Insider noting that the company “implied it had crypto exposure of $234 million in the first quarter of 2018, which roughly matches the 25 percent of the total crypto revenue," citing Steves.
There is a mother of a caveat though. Steves believes these numbers can’t actually be confirmed. It’s not like people had to disclose why they were buying a GPU at time of purchase; there’s no way for the companies to determine if a sale during the cryptocurrency boom was related to mining.
Still, the estimates are sure to raise more questions about Nvidia’s performance since the cryptocurrency boom, especially since Steves slashed his price target after his findings. Investors were already concerned; SoftBank, Nvidia’s largest shareholder, was reportedly considering selling its stake.
Nvidia CEO Jensen Huang attempted to ease some of those fears by saying the company had nearly sold through its remaining inventory of 10-series graphics cards ahead of schedule. The idea was that finally getting through the oversupply of 10-series cards caused by the crypto bust would let Nvidia start selling the Turing-based GPUs it had announced in the interim.
Yet the company lowered its Q418 revenue guidance in late January due to "weaker than forecasted sales of its Gaming and Datacenter platforms," among other economic factors, including Turing-based graphics cards being too expensive. We’ll find out exactly how bad things are for the company on February 14.