Mining of Virtual Currencies Drives Growth of NVIDIA Corporation (Nasdaq:NVDA) Revenues

Graphics chip maker NVIDIA Corporation (NASDAQ:NVDA) released quarterly results that beat estimates. Earnings per share came in at $1.72 while analysts had been expecting $1.16. in Revenue recorded for the quarter was $2.91 billion against estimates of $2.68 billion. The growth was driven largely by an increasing demand for Graphics Processing Units (GPU) which are commonly used for video games, data centers as well as in the mining of virtual currencies.

Though it was hard to tell how much the mining of digital coins contributed to the business the chip maker indicated that the figure had increased from the previous quarter.

“Strong demand in the cryptocurrency market exceeded our expectations. While the overall contribution of cryptocurrency to our business remains difficult to quantify, we believe it was a higher percentage of revenue than the prior quarter,” said the Chief Financial Officer of Nvidia, Colette Kress, during a conference call with investors and analysts.

Volta GPUs

Last year NVIDIA launched the Volta chip architecture which is used in Volta processors suited for self-driving vehicles and in artificial intelligence. According to the chief executive officer of NVIDIA, Jensen Huang, the product has been a phenomenal success with a high number of cloud service providers embracing the Volta graphics processing units.

Initially GPUs were developed with the intention of being used in handling graphics for premium video games as well as other computers. Due to the fact that GPUs take up some of the processing responsibilities from the main computing chip, they enable the faster and easier running of high end applications. This has seen them move beyond gaming to new technologies such as machine learning and artificial intelligence.

Data centers

Some of NVIDIA’s customers who utilize the GPU are Azure cloud business of Microsoft and Amazon Web Services. Analysts expect strong growth from the cloud computing sector this calendar year and beyond. The amount of sales that NVIDIA generated from selling to data center facilities has more than doubled to hit $606 million. Analysts had been expecting data center revenues of $541.1 million.

With regards to gaming Nvidia’s revenues from this segment increased by 29% to hit a figure of $1.74 billion.