But with the price of Bitcoin plummeting, it is just not economical to mine bitcoin for most people. It has been wildly known that a portion of Nvidia's GPUs are bought and used for Bitcoin mining. The second major factor which caused a large decline in Nvidia's gaming revenue was the 'Crypto correction'. Diving into the chart below, it's clear to see Nvidia had just 15% of the overall GPU market in Q1,21 but by Q1,22, the company had a substantial 21% of the market, while Intel's market share got squeezed. But Nvidia and AMD are leading in 'high performance' GPUs which are necessary for gaming. Intel ( INTC) has the largest market share in the Graphical Processing Unit ( GPU) industry with ~60% market share. According to a study by PwC, the gaming market is forecasted to grow at a rapid 9% Compounded Annual Growth Rate between 20, reaching ~$321 billion by the end of the period.ĭue to the secular growth trends, I expect Nvidia's gaming revenue to start to grow again longer term. So now we are just seeing a correction in demand to 'normal levels', but the long-term secular trend is still clear. Taking a step back, it's clear the gaming market is cyclical and had an unexpected boom over the lockdown of 2020, where the gaming market increased by 23% in value, which was the fastest rate in over a decade. Again, this was driven by a combination of factors such as the tepid consumer demand for gaming which also showed up in Microsoft's ( MSFT) earnings for the Xbox. Gaming revenue was $2.04 billion, which declined by an eye-watering 33% year-over-year. This may seem terrible at first glance, but when we dive under the hood, it's clear the reasons why.

Revenue was $6.7 billion which was up just 3% year-over-year and down 19% Q/Q. Nvidia reported mixed financial results for the second quarter FY23. In this post, I'm going to filter the signal from the noise and breakdown of Nvidia's Q2 earnings report and its valuation, let's dive in.ĭata by YCharts Filter the Signal from the Noise Nvidia is facing short-term headwinds, but in my opinion, these do not impact the long-term secular growth trends. Its most recent decline was driven by poor earnings results for the second quarter, but it still beat analyst expectations as they weren't as bad as expected. The company's share price has been butchered and is now down 54% from its all-time highs, which were in November 2021. Nvidia ( NASDAQ: NVDA) is a technology powerhouse that provides specialist building blocks for the gaming, data center, and even the AI industry.

Nvda earning report seeking alpha