Gadgetory

- So the news as of recent NVidia stock prices have dropped roughly 25% over the last week and may even continue to drop. Though what is with such a massive drop? Some are saying it is due to the cryptocurrency market completely being non-existent for GPU mining though some are saying that this is fake news and NVidia simply missed the revenue forecasts. An honest mistake they would say but around Tech Yes City we're always gonna give you the straight down cynical truth hurts approach. (upbeat music) But before we do get into the juicy GPU market and crypto news today's video is brought to you by Squarespace. Have you ever wanted to make a website for your small business and went and got a quote from someone and they've wanted to charge you thousands of dollars to make something that you may not even like? Well, they've got easy to build websites you can select from many different templates and it will guide you through things so you can have a self-managed easy to edit website up in no time that will look professional and will save you a lot of money. And speaking of saving money you can use the Tech Yes City link below to save 10%. Let's get on with it. So to say that the cryptocurrency demand has had nothing to do with NVidia stock prices would be a huge ignorance of fact at least in my opinion. I mean even NVidia themselves have blamed missed forecast around the fact that there was a massive pent-up demand for 10 series cards during the crypto rush which has since waned off greatly since June and now it's practically non-existent. That is the demand for graphics cards for cryptocurrency miners and this in turn created a massive oversupply of cards that simply aren't selling as well as they would like them to or at least forecasted to. Another massive contributing factor on top of this that I see no news articles talking about is that during this cryptocurrency boom time there were many accumulated graphics cards which in turn are now being sold off to gamers for a much cheaper than retail price. They in a lot of cases still have warranty too. So not only is there a massive oversupply but there is an increasing competition from the used second-hand market as well. One could say it's a stone cold sandwich with perhaps green lettuce being smashed in the middle. Though in relation to the said forecasts themselves revenue missed original estimates of $3.23 billion and came in at 3.18 billion in earnings per share after stock adjustments for quarter three 2018, came in at $1.84 per share missing the projected $1.94. However the revenue forecast has now been adjusted for the current quarter to 2.7 billion gravely missing that of the analyst 3.4 billion and here's where the massive panic like sell-off has begun. When companies miss market projections by a lot, this is generally a catalyst for stock prices to drop and drop a lot they have. Though it's not all bad news. Gaming revenue has rose 13% year-over-year and there are other segments like data center and also automotive has also experienced growth and even beaten estimates. So it seems like NVidia's stock really just got caught up in a game of easy crypto money and now they are paying for it and quite literally. Though another hopefully good thing to come out of this is that NVidia will hopefully realize what made their company grow so rapidly in the last six years and that is simply innovation and bleeding edge performance. I honestly feel like this round of RTX series cards hasn't been the best release and in fact I'd say it has been the worst release from NVidia since the 400 series cards. Where I'm used to seeing more FPS better prices and ultimately more efficiency I was personally left with a card that has features that don't work properly a month after release and also offer a mediocre improvement in price performance for current gaming at bests. So hopefully NVidia can get back to the traditional formula and continue to give us gains year-over-year and even if they don't I think they'll be forced to with Intel coming to the GPU game in the coming years and also AMD dropping their 7 nanometer Navi solutions though speaking of AMD their stock has suffered a similar downtrend though a more prolonged one which is a little bit perplexing since the stock prices have dropped basically 40% since their peak in September which despite the success of both Ryzen, Threadripper and second generation CPUs, GPUs sales have suffered a similar if not worse a fate to that of NVidia and in quarter three, they released their figures which showed a $150 million shortfall in GPU sales to where they only expected a $50 million decline. A massive drop in GPU demand compared to the first half of 2018 saw their revenue decreased by 6% in total compared to the previous quarter despite strong growth in CPU sales. Intel on the other hand hasn't seen the kind of falls that NVidia or AMD have seen which would, despite some naysayers indicate that yes, the crypto market just as much as it raised graphics card prices in early 2018 is now still causing damage to markets though ironically enough, the first time the pain was on the average consumer this time around the pain is reversed on the big corporations. Buy AMD stock, buy NVidia stock, could've, would've, should have. I've said in the past I will never touch stock markets again after 2008 and I probably never will. They just don't make any logical sense to me. I remember jokingly telling Yusuf here that shorting NVidia stock back in August would have been a good idea though the stock only continue to defy logic since August and grew to $290 in September and I honestly think overdone drop in price. Though ultimately yes, I believe crypto is to blame for the recent downturns on AMD and NVidia just as it was the catalyst that helped rise those stock prices to new heights, it is now the catalyst control center, all pun intended that is bringing them down. Also GPU mining itself has now been overtaken by ASCI miners. These are miners dedicated to mining cryptocurrency algorithms and interestingly enough, a company called Bitmain is on track to bring in over more than 10 billion in revenue in 2018 alone closing in on that of NVidia. So crypto is no joke though as for crypto itself that's the worst that has been in a long time with Bitcoin reaching below $5,000 US dollars and Ethereum breaking new one year lows dipping to below that of $150 as of recent. So like all things present we can't predict the future but perhaps this is beginning of something much much more dire so do tread lightly if you invest heavily in these things as when the easy money dries up, you only have the hard dollars left to contend for and believe me they can sometimes get very hard to contend for. I hope you enjoyed today's video. If you did then be sure to hit that like button also let us know in the comments section below what do you think will happen with the future of GPUs and also the future of cryptocurrency markets. Love reading your thoughts and opinions as always and also a big thanks to Squarespace for sponsoring our today's video, if you want to get a discount then use the link in the description below and I'll catch you on another tech video very soon. Peace out for now, bye. (upbeat music)