Cryptocurrency Mining Demand to ‘level-off’—AMD CEO
Amidst an ever-rising demand from the world’s cryptocurrency miners, the graphics card manufacturer AMD reported major sales jump in the third quarter of 2017. The company reported revenues of $819 million from its computing and graphics division on Tuesday afternoon. This was 74% increase over the previous year’s quarter. However, they claim that their cryptocurrency related and mining hardware revenue could fall by as much as 15%.
AMD’s graphics processing units have primarily been used by video gamers but the cryptocurrency proponents are rapidly employing the AMD tools for mining cryptocurrencies such as Ethereum and others. According to a statement issued by AMD, the revenue was primarily driven by strong sales of the company’s Ryzen desktop processors and Radeon GPUs—both employed for the mining of cryptos.
AMD has also noted that the sales of its Vega 56 and Vega 64 GPUs escalated considerably during the quarter. These fall into the category of the finest and most efficient devices in the cryptocurrency market owing to their significant processing power.
The surging sale of the GPUs has led to a 26% increase in the total revenue of $1.64 billion which is the company’s highest-grossing quarter since the year 2011.
However, while these numbers are climbing, the AMD shareholders aren’t impressed with the results of the third quarter.
Even with the high sales, the shares of AMD have dropped by 12% (from $14.25 at closing on Tuesday to $12.43 in after-hours trading). This was in coherence with the highly-cautious notion held by the investment communities towards AMD’s exposure to the highly unpredictable and potentially fleeting cryptocurrency market.
Moreover, AMD has anticipated a decrease in the cryptocurrency-related revenues for the fourth quarter by almost 15%.
“In terms of the headwinds…we’re also predicting that there will be some levelling-off of some of the cryptocurrency demand.”, said CEO Lisa Su.
The Bottom Line
The CEO conveyed a mixed message—giving surly statements about the future of cryptocurrency mining in relation to AMD’s earnings while leaving some room for other, unclear, opportunities. While ending her speech she said, “there’s also commercial blockchain component that we believe is interesting and likely to continue into the medium term.”
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