Until recently, the company was enviably positioned to supply coveted chips to booming cryptomining, AI, cloud computing and gaming sectors.
But after a banner 18 months that ran from the start of 2017 until September 2018, during which time the company’s stock price rose a handsome 163%, recent numbers and reports are far more modest.
“Crypto winter” has seen the price of bitcoin hovering at around 20% of what they worth when it peaked in December 2018.
Many other cryptos now trade for less than 10%, and there are stories of used crypto miners being offloaded at even smaller percentages -or being scrapped altogether- as many miners walk from a business with margins as volatile as crypto itself.
According to Barrons, Nvidia’s stock has now fallen 45% since October 2018, and Nvidia’s AI and cloud divisions grew only 12% during the last quarter, down from 58% in the previous quarter.
Nvidia also made 35% less than they expected last quarter ($2.2 billion versus $3.4 billion predicted).
The writing may also be on the wall regarding the company’s generic AI chip products, says Barrons.
According to the outlet:
“Earlier this week, Wells Fargo Securities analyst Aaron Rakers predicted that custom semiconductors made specifically for AI will take share from Nvidia. He noted that 13 private chip companies focused on the AI market have raised more than $1.2 billion in venture-capital funding.”
Andrew Feldman, founder and CEO of AI custom chipmaker Cerebras Systems, told Barron’s:
“Nvidia’s growth is unlikely to markedly improve until it releases a new round of chips, which could be two years down the line.”