Advanced micro devices (Nasdaq: AMD) And NVIDIA (Nasdaq: NVDA) The market has caught fire in 2020. Despite the widespread economic headwind of the coronavirus epidemic, stocks of both chipmakers have more than doubled in recent years.
But if you are thinking that these two hot stocks are moving high for the moment, you may find yourself pleasantly surprised. The return of a well-known catalyst – cryptocurrency mining – could give them a nice lift at the moment.
NVDA data of vicharts
Cryptocurrency Miners AMD and NVIDII GPO
According to third-party reports, NVIDIA and AMDA benefited greatly from the cryptocurrency mining craze in 2017 and 2018, selling graphics cards to miners worth about 800 800 million, according to third-party reports. But this was only one side of the story. That huge demand for cryptocurrency miners led to a shortage of GPUs (graphics processing units), which led to a sharp rise in their prices.
Following the recent release of AMD and NVIDIA’s latest pay generation cards, a similar trend is emerging, ensuring greater performance than their predecessors. New GPUs are already hard to come by, and the shortage is expected to run until 2021.
Wall Street sees heavy GPU purchases by cryptocurrency miners as one of the reasons for this shortage. According to RBC Capital Markets, NVIDI sold 5,175 million of its RTX 30 Series graphics cards in the third quarter of its fiscal year, compared to Oct Oct. Ended on the 25th. That’s an impressive figure that he hasn’t launched a new GPU. Until the second half of September.
If this is indeed the case, then it is not surprising to see why this is happening, as NVIDIA’s new pay generation GPU The report comes very quickly in mining. On the other hand, there are rumors that AMD’s latest RX6000 series card is also suitable for the job, with the RX6800 said to be significantly faster than NVIDIA’s RTX3090.
Given that the prices of cryptocurrencies such as Bitcoin and Etherium have soared late, AMD and NVIDI may experience significant demand related to mining. While this will be bad news for video gaming enthusiasts, chipmakers are likely to laugh their way into the bank as scarcity gives them prices.
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Don’t forget these growth drivers
NVIDIA’s video gaming business accounted for 48% of its revenue in the last quarter, and sales in the segment grew 37% during the year. AMDA also recorded an impressive Q3 growth of 31% during the year in its computing and graphics segment, accounting for about 60% of its total revenue. Depending on the current final market conditions, both companies may maintain this momentum for a while.
But investors should keep in mind that the demand for cryptocurrency miners will only add to the tailwinds that both companies are enjoying. AMD, for example, is credited with semi-custom revenue for the recent launch of new gaming consoles. Micro .ft And Sony. Additionally, AMD is stripping market share Intel Thanks to its consistently excellent offer fur in CPU (Central Processing Unit).
On the other hand, NVIDII is seeing strong quarter after quarter growth in its data center business (which produces 40% of its revenue). There is still much growth in the field to provide thanks to the growing demand for workforce hardware to support artificial intelligence and other high-performance computing functions. The chipmaker also wants to make a dent in the excellent but promising market for autonomous cars.
Finally, both NVIDIA and AMD have multiple tailwinds that propel their business forward, and this can send their share price up. The combination of heavy buying by cryptocurrency miners and the already overwhelming demand of the video gaming market, both make it possible to hold on to growth stocks, even after their solid run in 2020.
