With markets continuing their downward trend on Wednesday, the world's largest public company helped stymie the "sell" button with a strong quarterly earnings print.
GPU maker Nvidia reported third-quarter revenue of $57 billion and projected fourth-quarter revenue between $63.7 and $66.3 billion, well above the consensus estimate of $61.98 billion. Of note, Nvidia CFO Colette Kress said on the earnings call that the useful life of GPUs is being extended.
The positive news from the $4.5 trillion company sent its own shares up 5%, and had a ripple effect on the crypto sector. After falling under the $89,000 level earlier in the day, the price of bitcoin perked up to around $91,000 at publication time, according to The Block's price data. Meanwhile, investors also bought into several bitcoin mining stocks after closing the day down red.
Cipher Mining leads the pack, trading up more than 13% in after-hours trading. IREN was up about 10%, followed closely by Bitfarms, TeraWulf, and CleanSpark. MARA, the largest bitcoin mining stock by market cap, was up a more modest 4%.
The demand for data center capacity has surged along with the artificial intelligence movement in recent years, and, as a result, several bitcoin miners have pivoted some of their operations to handle AI/HPC infrastructure. Earlier this month, for example, IREN inked a $9.7 billion AI cloud deal with Microsoft, while Cipher Mining unveiled a $5.5 billion AI hosting deal with Amazon Web Services.
"Why did BTC miners sell off doubly on AI bubble fears? IREN (eg) is issuing debt to buy GPUs. Interest rate on loans is directly (inversely) related to GPU demand/supply balance. Falling BTC + widening spreads = double whammy given the capex needs," said Matthew Sigel, VanEck's head of digital asset research, in a post on X.
Last month, JPMorgan analysts said bitcoin mining stocks have decoupled from BTC's price, with their market caps rising sharply since July even as bitcoin has remained range-bound.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
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