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Nvidia Seen Posting Sales Beat on Surging Crypto Mining Demand

Nvidia is seen posting strong sales and earnings when it releases its quarterly earnings amid surging demand for its gaming graphics cards used to mine Ethereum.

Nvidia  (NVDA)  is expected to report strong sales and earnings when it releases its quarterly earnings report on Wednesday amid surging demand for its gaming graphics cards used to mine Ethereum, the world’s second-biggest cryptocurrency.

Nvidia is expected to post adjusted earnings of $3.29 a share on revenue of $5.41 billion. It will release results for the first quarter after the closing bell.

Check out Eric Jhonsa’s live blog of Nvidia’s earnings on Wednesday after the close.

Revenue estimates edged upward after Nvidia Chief Financial Officer Colette Kress said in April that “broad-based” strength meant the company was on track to report revenue above its prior forecast of $5.3 billion.

Analysts and investors have been touting Nvidia’s performance amid strong demand for its gaming graphics cards. The pandemic coupled with the ongoing chip shortage has boosted demand - and prices - for the chips and the cards themselves.

At the same time, surging prices for Bitcoin, Ether and other cryptocurrencies also have fueled demand. Crypto miners use graphics processing units, or GPUs, to mine currencies such as Bitcoin and Ethereum. Nvidia’s latest RTX 30 series, launched last year, has proven particularly popular with miners.

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TheStreet Recommends

TheStreet founder Jim Cramer noted in his daily Action Alerts Plus rundown on Monday that while Nvidia has performed well and its recent 4-for-1 stock split makes sense, the tie between cryptocurrency mining and the company’s performance is a little loose.

“I think that people just genuinely like to buy tech when crypto's doing well,” Cramer told TheStreet's Katherine Ross. “Now, look, I totally understand Nvidia. Nvidia has a card for Ethereum. And if people are digging for Ethereum, people probably say, 'you know what? I got to go buy Nvidia.'"

“I think that's stupid, because it's a very small part of the business. But I do think that Nvidia is trapped by the crypto people.”

From a technical perspective, Real Money's Bruce Kamich sees Nvidia’s charts showing support for further gains.

"... The charts and indicators point to higher prices ahead," wrote Kamich. “If there is a $5 dip in reaction to the numbers, aggressive traders could use that to go long. Risk to $575 for now."

For more on how you can profit from reading Kamich's charts, check out Real Money.

At last check, shares of Nvidia were up 0.24% at $627.40.

Nvidia is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells NVDA? Learn more now.