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Investing.com – Nvidia stock (NASDAQ:NVDA) traded 3.3% lower in premarket Thursday after the chipmaker reported flat margins in the fourth quarter, raising concerns over its exposure to cryptocurrency mining.
The chipmaker has set lofty expectations, and the lack of change in its adjusted margin left participants unimpressed. Nvidia’s 67% margin compares unfavorably with 72% at Analog Devices (NASDAQ:ADI), a much smaller company.
“Volatility in the cryptocurrency market including changes in the prices of cryptocurrencies or method of verifying transactions, such as proof of work or proof of stake, can impact demand for our products and our ability to accurately estimate it,” Executive Vice President and Chief Financial Officer Colette Kress told analysts in a conference call.
Revenue from cryptocurrency mining processors in the quarter was $24 million, less than a fourth of sales in the previous period.
Persistent supply chain problems at automotive clients also translated into lower revenue at the segment for Nvidia, both on a year-on-year basis and sequentially.
According to Bloomberg, Chief Executive Jensen Huang expects the company’s own supply issues to improve. Huang suffered a setback recently when the company had to shelve its deal to buy chip designer ARM in the face of regulatory pushback. The CEO said Nvidia will increase the number of ARM-based processors it makes.
Nvidia expects revenue in the current quarter to be $8.1 billion, up around 43% on the year. In the fourth quarter, it had grown 53% on the year to $7.6 billion. Adjusted profit per share climbed 69% to $1.32 on higher margins and beat estimates.
