NVIDIA held their quarterly conference call yesterday, giving investors a closer look into current GPU demand from the electronic giant. The meeting kicked off with a overview of the company’s earning, with CFO Colette M. Kress stating “while [GPU] supply was tight earlier in the quarter, the situation is now easing. As a result, we were pleased to see that channel prices for our GPUs are beginning to normalize, allowing gamers who had been priced out of the market last quarter to get their hands on the new GeForce GTX at a reasonable price.” As we know from our GPU pricing tracking most NVIDIA GPU products are still slightly above MSRP, although those prices have been dropping over the last month.
Kress continued, saying “cryptocurrency demand was again stronger than expected, but we were able to fulfill most of it with crypto-specific GPUs, which are included in our OEM business at $289 million. As a result, we could protect the vast majority of our limited gaming GPU supply for use by gamers. Looking into Q2, we expect crypto-specific revenue to be about one-third of its Q1 level.”
Reiterating sentiment from recent interviews, NVIDIA chiefs continue to point out that although cryptocurrency captured the attention of the media, it’s effect on earnings is dwarfed by it’s other business units. The company announced a 71% revenue increase in it’s data-center products, netting $701 million from that division. Kress also highlighted increased growth in NVIDIAs artificial intellegence products as well as it’s autonomous vehicle divisions.
During the Q&A session following the call, NVIDIA CEO Jen-Hsun Huang addressed the cryptocurrency demand by stating “Surely, there was [GPU] scarcity as you know. Crypto miners bought a lot of our GPUs during the quarter and it drove prices up. And I think that a lot of the gamers weren’t able to buy into the new GeForce as a result. And so we’re starting to see the prices come down. We monitor spot pricing every single day around the world. And the prices are starting to normalize. It’s still higher than where they should be. And so obviously, the demand is still quite strong out there.”
Because we live in a crazy world, the popularity of Battle Royale game types also made the Q1 call, with Huang stating “the success of Fortnite and PUBG are just beyond comprehension, really. Those two games are a combination of Hunger Games and Survivor has just captured imaginations of gamers all over the world. And we saw the uptick and we saw the demand on GPUs from all over the world.”