Too many cryptocurrency clients and fewer cloud computing orders than expected underwhelmed Nvidia investors on Thursday, although the graphics chip maker said a supply shortage that hit its core video game audience had eased.
The U.S. company best known for chips that enhance video game graphics has diversified into an array of businesses including artificial intelligence, self-driving cars, and digital mining, but investors are most concerned with its inroads in the market for cloud computing.
Revenue from Nvidia's data center business, which powers cloud-based services such as Amazon.com's Amazon Web Services, Microsoft Corp's Azure as well as Alphabet Inc's Google Cloud, rose 71 percent to $701 million, but missed analysts' estimate of $703 million, according to Thomson Reuters I/B/E/S.
The Santa Clara, California company for the first time disclosed that it made $289 million in sales — about 9 percent of its overall $3.2 billion in revenue — from chips for mining cryptocurrencies.
Analysts had expected $200 million and the greater reliance on the fast-growing but volatile business contributed to shares falling 3.3 percent to $251.66 in extended trading. Nvidia shares have gained 34.4 percent this year, propelling the stock to the top of the Philadelphia Semiconductor Index. They touched a record high at $260.50 on Thursday before the announcement.