GPU Producer Nvidia Is The Worst Performer In S&P 500 After Crypto Mining Crash

The massive decline in crypto mining profitability has impacted heavily GPU producers such as Nvidia which as previously reported in our blockchain news, experienced a massive sell-off of its shares dropping the stock price by almost 55 percent.

Nvidia is now ranked as the worst performer in S&P 500. From 2016 until September this year (2018) Nvidia’s market value increased to $175 billion since the demand for GPU for crypto mining increased immensely. The company reported the profits from crypto mining back in May showing a two-thirds drop in sales for Q2.

The company showed insignificant crypto mining relates sales in Q3 but the GPU sales for blockchain-related applications disappeared. The CEO of Nvidia Jensen Huang explained that the results show ‘’excess channel inventory after the cryptocurrency boom.’’

The decline in crypto-related sales has brought the company to a ‘’crypto hangover’’ according to Jensen Huang. The crypto madness brought the price to increase a lot but once the demand disappeared, prices didn’t decrease fast enough to attract new customers.

Now, the stocks of Nvidia are down by 4.09 percent.

Chip stocks have also performed poorly this year. Major hardware producers such as Nvidia and Advanced Micro Systems show a drop in the PHLX Semiconductor Index by 20.37 percent over the past three months. AMD’s share price is also down by 45.43 percent.

After the mining boom happened, there has been a huge drop in prices. AMD’s most popular Radeon RX580 Graphics processing unit is now selling for $180 which is down by almost 70 percent after it was selling at $550 in February.

Miners are excessively leaving the business and are even selling off their hardware. The profits from crypto mining are not enough to cover the electricity costs or any other associated costs.