AMD expects Q1 revenue to drop due to declining demand from cryptocurrency miners

Graphics card manufacturer AMD is estimating a decline in revenue at the end of Q1, partly due to the dwindling demand from cryptocurrency miners.

AMD graphics cards are essential to cryptocurrency mining. As a result of crypto miners buying the graphics cards, AMD’s stock price rocketed from as low as $1.80 in 2016 to more than $34.11 in 2018.

However, due to the gruelling bear market and subsequent fall in the price of cryptocurrencies, mining profitability has been declining. As a result, AMD graphics cards are no longer in as much demand as they once were, and the stock price has fallen almost 50% since September 2018.

The company released their Q4 2018 and annual earning report on Tuesday, in which it stated that they brought in $6.48 billion over the course of 2018, $1.23 billion more than the previous year.

The report claimed that a lack of revenue from the “blockchain-related GPU” space has hit the company the hardest, citing it as a reason for missing their target by $20 million.

“For the first quarter of 2019, AMD expects revenue to be approximately $1.25 billion, plus or minus $50 million, a decrease of approximately 12 percent sequentially and 24 percent year-over-year,” AMD stated.

“The sequential decrease is expected to be primarily driven by continued softness in the graphics channel and seasonality across the business. The year-over-year decrease is expected to be primarily driven by lower graphics sales due to excess channel inventory, the absence of blockchain-related GPU revenue, and lower memory sales.”

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