U.S. chip development company Nvidia proved that its shares fell due to a drop in CMP (cryptocurrency mining process) sales. The company said its 52% decline in “OAM and other” investments in the first quarter was due to lower CMP sales.As explained in an article, Nvidia said this archive on Wednesday.
In 2021, Nvidia earned $24 million in returns from its CMP sources; this also recorded a dismal year-over-year decline of 77%.
Last January, the company launched its CMP product to stop cryptocurrency miners from stockpiling existing mining rigs, such as Ethereum’s famous GeForce RTX 3080 Ti.
Related reading | Perp traders keep silent as Bitcoin struggles to hold $30,000
While the chipmaker didn’t explain the exact sales its CMP sales provided, it did mark a “nominal” value and posted a loss of more than $155 million from the previous year.
Nvidia stock plunges at the end of the first quarter
From the last quarter of 2021 to the first quarter of 2022, the company experienced strong quarterly growth with an 8% increase in returns. So up to $8.98 billion. Its shares also rose 3% to $1.36 a share. Additionally, the chipmaker said it will continue its buyback program until the end of 2023, worth $15 billion.
Nvidia and Q2
Nvidia’s interest in CMP mining chips has been steadily declining in the second quarter. The reason for this may be that Ethereum was ported to a proof-of-stake mechanism. The current bear market, or the recent deployment of products by industry leader Intel Corporation. We don’t know, but we do know that the tech giant’s current turnover is not good.
The start of the second quarter was less interesting than the first, with experts expecting a 4% loss in revenue to $8 billion. Shares of Nvidia (NVDA) fell 7% to $157.8 in after-hours trading on Thursday. Also, NVDA stock fell nearly 50% in the year-over-year report, reflecting the poor outlook for tech stocks.
Related reading | Bitcoin Bearish Signal: Whale Ratio Continues to Hold High
In the second quarter of last year, Nvidia’s expected return fell 33% to $266 million, compared with $106 million in the third quarter and $24 million in the fourth quarter. This value is still falling. The chipmaker revised its forecast for the second quarter (Q2) to total revenue of $8.1 billion due to Russia’s war with Ukraine and China’s blockade.
Nvidia CMP and cryptocurrency mining
Nvidia’s Santa Clara-based CMP efficiently mines bitcoin, ether, and other digital assets that use the proof-of-work consensus mechanism. In addition, the coin’s graphics card is built for gaming and, apart from being restricted, can effectively mine cryptocurrencies.
A notable fact is that the supply of CMP is very scarce. Even on the secondary market, they are hard to find. Therefore, the chances of making a sale are getting smaller and smaller.
Featured image from Pixabay, chart from TradingView.com