Nvidia's third-quarter revenue hits record high as miners buy $175 million in graphics cards

Nvidia this week reported better-than-expected results for the third quarter of fiscal 2020, helped by sales of its GPU graphics cards. The company reported $2.79 billion in revenue for its GPU chip division for the quarter, ahead of analysts’ estimates of $2.1 billion.

Nvidia said its new graphics card series based on a new technology called Ampere has attracted strong interest from computer and video game console developers. For example, one of the new models, the GeForce RTX 3080, went on sale in September and sold out immediately.

Nvidia said gaming revenue grew 37% year-on-year to $2.27 billion, a company record.

Nvidia makes graphics processing units that are used primarily in video game consoles and graphics cards, but they have also become popular among cryptocurrency miners, particularly Ethereum (ETH) and Monero (XMR).

According to a report by RBC Capital Markets analyst Mitch Steves, in the quarterly earnings review, Nvidia sold at least $175 million worth of new-generation GPU graphics cards to Ethereum miners, indirectly helping them gain computing power. The analyst had expected sales of graphics cards purchased by Ethereum miners to reach $150 million this quarter.

Steves noted that the upcoming network upgrade of the Ethereum blockchain, also known as Ethereum 2.0, which is scheduled for early December, requires miners to switch to more efficient mining hardware. Nvidia’s new Ampere GPU chips are believed to meet this need.

However, GPU graphics cards cannot mine Bitcoin (BTC), which can only be mined using more efficient application-specific integrated circuit (ASIC) miners.

Overall, Nvidia reported revenue of $4.73 billion for the quarter, up 57% year-over-year. Analysts expected revenue of $4.41 billion. The company disclosed that it continued to face supply bottlenecks for chips and graphics cards in the fiscal fourth quarter that ended in January.

The company also said it expects to complete its acquisition of British chip designer ARM, owned by Japan's SoftBank, from the first quarter of 2022.

In Nasdaq stock trading last Friday, Nvidia's stock price fell 0.92% to $532.65. In the past 52 weeks, the stock's highest price was $589.07 and the lowest price was $180.68, an increase of more than three times.