Le ralentissement de Nvidia est-il lié aux jeux vidéo… ou aux cryptomonnaies ?

Le ralentissement de Nvidia est-il lié aux jeux vidéo... ou aux cryptomonnaies ?

18 days after the publication of its results, the processor manufacturer Nvidia preferred to take the lead. In a statement, it warns that it will miss its sales target for the fiscal second quarter by 17%, with 6.7 billion dollars instead of the 8.1 billion forecast in May. The company justifies this failure by the difficulties in the video game market, and the slowdown in PC sales, which causes a drop in processor sales. But he does not mention the general fall in cryptocurrency prices, which has reduced interest in mining them, an activity that requires the use of processors. Nvidia’s stock price fell 10% following these announcements.

What are Nvidia GPUs used for?

The company forecast more than $3 billion in revenue for its “games” division. [jeu vidéo, ndlr], but it only made $2.04 billion in sales. That is, it only achieved 66.7% of its objectives. Above all, it is the first time in three years that the gaming division has achieved a lower turnover than the previous quarter. Worse yet, its current level is only slightly higher than it was before the health crisis. The market expected a drop in GPU sales, in particular as various manufacturers (such as Asus or MSI) and PC builders had reported their figures. But analysts had not anticipated the magnitude of this collapse. And for good reason: The drop in GPU sales could have a different cause than the drop in gaming PC sales.

The real question is how much of this arrangement is related to gaming and how much is related to cryptocurrencies.“, informs La Tribune, Jacques-Aurélien Marcireau, co-head of equity management at Edmond de Rothschild Asset Management. Nvidia is the main manufacturer of GPUs, processors better known as “graphics cards”, which equip all computers. Mechanically, a drop in PC sales affects your GPU sales. But Nvidia processors are also popular with crypto miners. Broadly speaking, this activity consists of putting the computing power of your computer -contained in your processors- at the service of the operations necessary to validate the transactions of a block chain. In exchange for participating, the owner of the computer receives a fraction of the value created in the form of cryptocurrency. Result: the explosion of the price of Bitcoin (and others) during the health crisis has led to the multiplication of “farms” full of processors destined to mine Bitcoin.

Problem: When the price of cryptocurrencies goes down, the interest in mining decreases. The miner must provide as much computing power – with the related costs (hardware, electricity, space, etc.) – but the cryptocurrency they receive in return is worth less in dollars or euros. However, as Jacques-Aurélien Marcireau points out, Nvidia does not communicate (and perhaps does not know) how many GPUs are used for mining among those that equip high-end computers, intended for games.

Still crazy growth in data centers

If the gaming division, Nvidia’s historical business, is experiencing turmoil, this is less the case with its data center division. It also missed its revenue target, but to a lesser extent, 6 points below forecasts. It posted an impressive 61% growth compared to last year, to $3.8 billion. Nvidia processors power much of the servers that are run for the cloud, a rapidly growing market driven by the Amazon-Microsoft-Google trio.

The group notably takes advantage of the efficiency of its GPUs to train so-called “artificial intelligence” algorithms. “Today, Nvidia has a near monopoly on reinforcement learning. [aussi connu sous le nom de deep learning, ndlr]”, specifies Jacques-Aurélien Marcireau. Result: its processors invade data centers, at the expense of those of Intel, whose turnover in the sector fell by 16% in the second quarter compared to last year.

In other words, even if the gaming division’s turnover were to return to its pre-crisis level, with the saturation of the gaming PC market and lower demand from the crypto sector, Nvidia’s growth trajectory should continue on its path.