Nvidia Announces Preliminary Financial Results for Second Quarter Fiscal 2023

Looks bad. Most of what they call gaming segment was related to crypto, they’d never acknowledge it but that’s what it was. The started cutting pricing on GPUs and I suspect confirmed they were hit by a billion charge related to inventory > making a lot of GPUs when crypto was doing well and prices were insane and now they can’t sell all those GPUs (old orderrs from chip manufacturers etc).

A gamer with one card probably wouldn’t want to deal with the hassle of selling it on the secondary market, but a crypto miner with 100 cards absolutely will. So of course Nvidia was going to have to compete with these cards for new sales. Even without a crypto crash an increase in difficulty would have pushed out the marginal miners.

It doesn’t help that energy costs have gone up making mining not palatable when buying coins direct from market is cheaper.

To give them credit though, they’ve always tried to downplay crypto for a long time as they knew it was unsustainable even including LHR cards that would gimp Ethereum hashrate.

Gross margin is their sales price minus costs of goods sold.

Doesn't include indirect costs, which include non-recurring engineering (NRE). Which is huge for a company like Nvidia designing and verifying new parts, and paying for the masks to make them, which appear to go down to TSMC's 3nm node. Also making new reference designs for boards, I hope tech support for OEMs etc.

They're also one of the very few hardware companies that's good at software and that appears to be done with six figure market salaries per a search I just did.

High gross margins also give them maneuvering room when the market turns against them like now and very possibly for a while longer, and I seriously doubt they've ever believed they could confidently predict what the cryptocurrency market would do with their repurposed systems.