New Ethereum Mining & other coins mining market trends should worry AMD & NVIDIA

Shares of AMD (Advanced Micro Devices Inc) and NVIDIA are being effected by the dramatic changes to crypto mining market. AMD have gained nearly 30% in the past month, but the stock’s rapid rise hasn’t put to rest worries about the revenue AMD generates from cryptocurrency mining.

In crypto craze, AMD’s AMD, +0.96% graphics processing units (GPUs), designed for gaming originally but have proven useful to crypto miners in many cases like Ethereum mining. For several quarters now, some analysts have warned that AMD investors could be in for disappointment if cryptocurrency mining dies down, or if miners opt for alternatives to AMD’s GPUs. Some analysts renewed these concerns this week.

Bernstein analyst Stacy Rasgon wrote:

“Given AMD’s GPUs have been preferred for mining, and GPU supply in general to gamers was constrained industry-wide, we believe it is plausible that much of AMD’s GPU ramp has benefitted miners, rather than gamers, over this period,” Rasgon said.

Morgan Stanley’s Joseph Moore, who reiterated his bearish stance on the stock Wednesday, is also concerned about crypto exposure.

“Cryptocurrency strength has to some degree offset the slow and steady progress establishing momentum in desktop and server microprocessors after several years away from those markets — but that higher revenue has driven higher operating expense, which further raises the bar for the processor business if crypto momentum should fade,” Moore wrote. He added that AMD is “facing an imminent Nvidia product launch that they may not have an answer to for another year.”

Of the 31 analysts who cover AMD, according to FactSet, 13 have buy ratings, 12 have hold ratings, and six have sell ratings. The average target is $14.54, 12% below current levels.AMD’s stock has gained 61% so far this year, while the S&P 500 SPX, +0.19% has ticked up 3.5% and the PHLX Semiconductor Index SOX, -0.72% has risen 11.6%.

Tags: nvda, nvidia, technology, criptocurrency, amd, amd gpu, gpu mining, ethereum mining, mining, new ether mining, gpu coin mining

Mohsen Daemi
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