Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Ethereum Move Proof-of-Stake to Hurt GPU Demand But Nvidia Less Exposed - Morgan Stanley

Stock Markets Jun 27, 2022 17:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Sam Boughedda

In a research note Monday, Morgan Stanley equity strategist Sheena Shah, writing about the crypto market, said GPU demand should slow as the second-largest crypto blockchain Ethereum plans to move from using the energy-intensive Proof-of-Work approach to the less energy-intensive Proof-of-Stake, but "NVIDIA (NASDAQ:NVDA) is less exposed to crypto mining demand vs. 2017-19 cycle."

Shah wrote that with crypto prices having fallen, mining is less profitable than a few months ago and if Ethereum moves to using Proof-of-Stake (PoS) it will eliminate the need for miners and thereby reduce demand for GPUs.

"Bitcoin and Ethereum currently require powerful computers for the mining process and consume a lot of energy which governments and regulators are increasingly concerned over. If Ethereum moves to using Proof-of-Stake (PoS) it will eliminate the need for miners (reducing demand for GPUs) and drastically reduce energy requirements," said Shah. "Cryptocurrency mining had a dramatic impact on the gaming graphics markets in the last 18 months, driving an estimated 14% of revenue in CY21 but also substantially contributing to a major graphics shortage which boosted overall mix and pricing."

The analyst added that analyzing the terahash contribution suggests total GPUs for crypto drove a significant amount of revenue last year, with roughly $600 million being "NVIDIA specialty "crypto mining processors," implying roughly $2bn."

"That has fallen to $400mm or so per quarter in 1H22. This compares to about $12bn of gaming GPU revenue for NVIDIA and $2bn for AMD (NASDAQ:AMD); it's very difficult to know how much revenue came from which vendor. But this would mean that crypto contributed roughly 14% to overall gaming GPU revenue last year."

Ethereum Move Proof-of-Stake to Hurt GPU Demand But Nvidia Less Exposed - Morgan Stanley
 

Related Articles

Dow Futures Slip as Major Indices Snap Rally
Dow Futures Slip as Major Indices Snap Rally By Investing.com - Aug 18, 2022

By Oliver Gray  Investing.com - U.S. stock futures traded lower during Wednesday's evening deals, after major benchmark indices snapped a 5-day rally with risk sentiment souring as...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email