![Average nvda price drop](https://knopkazmeya.com/8.png)
NVDA's exposure to crypto-mining-related GPU sales is around $1.5B per quarter. We believe the weakened demand has created excess channel inventory for GPUs. The following graph maps out NVDA's stock against Ethereum's hash rate to reiterate NVDA's exposure to crypto-mining-related GPUs and its decline without crypto-related GPU sales. We believe the transition has depressed NVDA's GPU sales significantly and caused the gaming revenue to drop steeply. The transition will allow individuals to mine crypto without the use of GPUs. We believe NVDA's gaming sector has no meaningful growth catalysts as Ethereum completes its switch from Proof of Work (PoW) to Proof of Stake. We called out NVDA's exposure to GPU-related sales earlier this year, and last week's earnings confirmed our belief as gaming revenue fell 44% sequentially. The affair between NVDA's GPUs and crypto-mining is still depressing GPU sales We will revisit the NVDA story as we seek positive inflection in its business. While we are bullish on the company's long-term prospects, we believe the company still has more downside ahead and recommend investors sell the stock at current levels. However, we expect more downside as demand for data centers also normalizes. We believe weak GPU demand will continue due to channel inventory and as Ethereum completes its transition to PoS in September. We believe the stock's 46% drop YTD is due to its exposure to GPU-related sales and Ethereum's switch to Proof of Stake (PoS), which no longer requires GPUs to mine crypto. Our bearish thesis is based on our belief that the stock pullback will continue as gaming demand remains weak and data center demand slows down materially. Following last week's F2Q23 results, we remain bearish on NVDA and believe there is more downside for the stock from the current levels, primarily driven by weakening demand for data center products and the glut of GPUs in the secondary markets and in the channels.
![average nvda price drop average nvda price drop](https://investorplace.com/wp-content/uploads/2019/06/NVDA-1.png)
![average nvda price drop average nvda price drop](https://deckbox.org/system/images/mtg/cards/2016615.jpg)
We previously published a negative piece on Nvidia on SA, citing its over-exposure to crypto mining.
![average nvda price drop average nvda price drop](https://static.seekingalpha.com/uploads/2019/1/4/saupload_46035df0c101e2eef14ff9ce62a9046f.png)
NVIDIA Corporation ( NASDAQ: NVDA) is a formidable technology company specializing in gaming and data center products.
![Average nvda price drop](https://knopkazmeya.com/8.png)