Crypto mining is fueling GPU demand
NVIDIA (NVDA) is apparently unable to keep up with the soaring demand for its graphics processing units (or GPUs), which is driving up prices. While NVIDIA’s GTX 1080 Ti GPU usually sells for $700, the price has gone up nearly 200% for some retailers. The price of the entry-level GTX 1060 GPU has jumped to about $450 from the usual price of roughly $300.
NVIDIA rival Advanced Micro Devices (AMD) has also seen prices of its GPUs soar with the price of Radeon RX 580 GPU rising as high as $600 at some retailers from the usual price of $300. The strong demand for GPUs is due to the rise of cryptocurrency mining, and recent bitcoin gains are stoking the demand for GPUs in the crypto mining market.
Revenue up 34% amid strong GPU sales
Uptake of NVIDIA’s GPUs by crypto miners contributed to the strong financial performance the company posted for the three months ending January 2018, its fiscal 4Q18. The company reported fiscal 4Q18 revenue of $1.9 billion, up 34% from the year-ago quarter and above the consensus estimate of $2.7 billion. The top-line gains were driven by strength in the GPU business, where revenue rose 33% year-over-year to $2.5 billion.
Rise in GPU demand for crypto mining is bittersweet for NVIDIA
Although uptake of its GPUs in the crypto mining market is bringing it more business, NVIDIA is not entirely comfortable with these trends. Since it’s struggling to produce enough GPUs to meet the soaring demand, NVIDIA views GPU sales to the crypto market as depriving its core gaming market.