The stock prices of leading multinational computer chip manufacturer Advanced Micro Devices Inc (AMD) have recently sunk as the company revealed in its Q3 financial report that its revenue was of $1.65 billion, below the estimated $1.7 billion. GPU sales to cryptocurrency miners, it reads, were “negligible.”
This as the report notes these sales only accounted for a “high single digit percentage” of AMD’s sales. The company’s Computing and Graphic segment has seen a 12% year-over-year increase in revenues, although the company reportedly failed its estimates because of it.
The decline saw AMD’s stock prices drop as much as 14.4% at press time to about $19.4, according to Yahoo Finance data.
The drop comes amid a wider equities sell-off that ultimately saw Nasdaq have its worst day since 2011, related to fears of a US-China trade war and the European Union rejecting Italy’s budget. The price of most cryptocurrencies, as CryptoGlobe covered, dropped slightly amid the crash.
AMD had earlier this year revealed it expected “near zero” revenue from selling GPUs to cryptocurrency miners, after seeing its earrings skyrocket in the beginning of the year over rising demand. The company’s CEO Lisa Su commented on the expected revenue decline, noting at the time it was planning to see “very little blockchain.”
Earlier, Su had stated she believes blockchain technology is important, but also a “bit of a distraction in the short term,” as while it may be a part of the future the company needed to focus on other things. She was quoted as saying:
It’s a very important technology. The idea you can do all these peer-to-peer transactions and a decentralized market, but it’s a bit of a distraction at this point. We want to focus on the core markets.
Declining GPU Sales
AMD’s GPUs have been seeing their sales decline to cryptocurrency miners because of the substantial decline in the market capitalization of most cryptocurrencies, coupled with an increasing mining difficulty.
Bitcoin, the flagship cryptocurrency, saw its price drop from a near $20,000 all-time high late last year to about $6,450 at press time, according to CryptoCompare data. The decline saw bitcoin mining become unprofitable, although miners generated $4.7 billion in revenue in the first three quarters of this year.
According to blockchain research firm Diar, mining cryptocurrencies while paying retail electricity prices is now unprofitable, meaning large operations are the ones that currently manage to survive.