While rival Advanced Micro Devices, Inc. (AMD) saw some gains on Tuesday, Nvidia (NVDA) shares sunk — possibly due to concerns about declining crypto demand.
Nvidia said in its earnings call last week that it expects cryptocurrency mining-related demand for its graphics processing units, or GPUs, to drop by about two-thirds in the second quarter. AMD CEO Lisa Su also talked about slowing demand during the 2018 JP Morgan Technology, Media and Telecom Conference on May 15.
But while AMD’s stock increased 1.8% to $12.45 Tuesday, Nvidia’s shares dropped 3.8% to $245.56.
The sell-off could be due to the news of declining demand of GPUs for cryptocurrency mining as well as post-earnings profit-taking and broader weakness in chip stocks recently. Nvidia shares are up more than 80% in the last year, and 27% since the beginning of the year.
Nvidia’s crypto mining guidance might have prompted fears that the aftermarket could be flooded with GPUs put up for sale by former miners, or that more miners might shift to application-specific integrated circuits, or ASICs.
Bernstein analyst Stacy Rasgon said that “a lot of high growth tech is down today, too … so Nvidia could just be part of [that trend].”
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