Nvidia is reporting some excess inventory in the company’s mid-range graphics cards. The problem? Prices for GPUs failed to quickly stabilize after cryptocurrency miners briefly drove up demand.
Nvidia has a glut of unsold graphics cards thanks in part to crytpcurrency miners no longer buying GPUs.
On Thursday, Nvidia said it was experiencing some excess inventory in mid-range graphics cards, blaming the problem on the “post-crypto hangover,” which temporarily inflated prices for the company’s GPUs.
“When pricing is volatile in the channel, it probably freezes some people waiting for prices to stabilize,” said Nvidia CEO Jensen Huang during an earnings call. “And that took longer than we expected, frankly.”
Nvidia initially reported the plummeting sales in graphic cards from cryptocurrency miners back in August. However, the company is still feeling the ripple effects from the waning demand because prices for Nvidia’s graphics cards have taken time to normalize, company executives said.
The unsold graphics cards led Nvidia to miss its original revenue projections for the third quarter, which came in at $3.18 billion, down from the forecasted $3.25 billion.
“We thought we had done a better job of managing the cryptocurrency dynamics, but when the prices came down, we started to come down,” Huang said.
However, Nvidia’s CEO doesn’t expect the glut to last, given that pricing has stabilized. “Now that it’s at the right level, our expectation is that the market will return to normal,” he added.
Last year, prices for the company’s GPUs started to inflate when a single Bitcoin was reaching close to $20,000 in value. To generate the digital gold, cryptocurrency miners were buying up Nvidia graphics card to help them mine the virtual currency.
But since then, the cryptocurrency market has taken a sharp dive. Bitcoin is now valued at $5,500 a coin.
