Why Nvidia Stock Was Dropping on Monday
Shares of Nvidia (NASDAQ: NVDA) were trading down almost 3% after the market open on Monday after Morgan Stanley cautioned investors about the potential for slowing demand in graphics processing units (GPUs). As of 12:32 p.m. ET on Monday, the stock had recovered but was still down 1.4%, with the Nasdaq Composite down 0.4%.
Morgan Stanley believes Ethereum's planned shift to a proof-of-stake model could slow demand for GPUs that are used to mine cryptocurrencies. This could have an impact on near-term demand for Nvidia's GeForce GPUs that have been used in crypto mining, although it's not clear how much of Nvidia's gaming revenue is coming from the cryptocurrency market.
Nvidia has reported robust growth in its gaming segment over the last year. In the most recent quarter, the gaming business grew 31% year over year, totaling nearly half of the company's total revenue. Since 2018, Nvidia has moved to dampen sales of its gaming GPUs to crypto miners with the release of Cryptocurrency Mining Processors. But the company still doesn't know exactly how much revenue is coming from crypto-related sales.
Source Fool.com
