With many companies negatively affected by the COVID-19 pandemic, Nvidia’s case has been opposite as it has enjoyed good returns. So far, it has experienced the best financial quarter in its history with its stock enjoying an all-time high.
Even though the company has been experiencing a supply problem, it is headed to achieve $50 million sales of the CMP chip range by the end of the first quarter.
According to its chief financial officer Colette Kress, Nvidia was unable to meets the demands in the gaming field in 2020 and looks like the trend will carry on to 2021. The company has experienced a surge in demand from crypto enthusiasts who wanted to integrate the chip with Ether mining.
Kress confirmed that the crypto mining process it (CMP) product lines eyeing 50 million sales by end of the first quarter. CMP is specially made for mining Ether to meet the demand of the RTX 30 series.
Nvidia’s revenues peaked in 2020 where it gained revenues of $5billion in the last quarter of the year. Its stock has just experienced an all-time high. Its situation can e likened to the 2018 market condition where there was higher demand than price pushing sock price to the highest level in its entire history.
There is hope for the shortage of supply as the US president Joe Biden recently signed an order to address the shortage of both semiconductors and microchips. The issue will be addressed with critical depth to identify the source of the failing supply lines.
The chip shortage is the one responsible for increased performance of chip-related stocks. We can tell through the PHLX semiconductor index that has increased by 70% in the last one year.
According to a JPMorgan analyst, the trend may continue for some time though it is highly unlikely that the supply shortage will be corrected soon. Even though there are semi companies working on meeting the high demands, they can only address 15% of the demand. That means there is need for 75% of supply for the situation to get back to normal.
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