Advanced Micro Devices, Inc (NASDAQ:AMD) has defended itself against claims that its operations are fueled by the cryptocurrencies. The company reiterated that only less than 10% of its revenues are from the crypto-mining. Recently, a report on AMD revenues was published that revealed that most of the company’s revenues are linked to the Ethereum-related GPU sales. However, the firm refuted the claims and went farther to quote the source of its 2017 fourth quarter earnings.
According to Christopher Rolland, a Financial Analyst at Susquehanna Financial, AMD and Nvidia Corp have gained a large percentage from using GPUs to mine the cryptos on the Ethereum blockchain. AMDs stock dropped immediately after the reports were posted.
The cryptocurrency sector is constantly growing and currently, there are a wide range of digital currencies to choose from Bitcoin down to the tiniest fragmented tokens such as Dogecoin. Hence the crypto-mining is increasingly responsible for the inflated prices of the GPUs particularly for the last one year.
According to Rolland, about 20% of the AMD’s sales are accrued from the Ether miners when they purchase graphics cards. Generally, crypto-miners use graphics cards basing on AMD’s and Nvidia’s chips to ‘mine’ new coins that are later sold or held for future consideration. According to Coinbase data, the cryptocurrency Ethereum is up for over 800% for the last one year.
However, currently the Bitcoin market has been dominated by the ASIC chips offered by Bitmain that are reportedly more efficient than the graphics cards provided by both AMD and Nvidia. Susquehanna has predicted a drop in the prices of AMD and Nvidia shares due to the imminent competition from the new mining firm, Bitmain.
Both the two mining companies will definitely suffer once Bitmain launches its operations in the market this year. According to market analysts, Bitmain’s revenue is accrued from selling of the mining rigs that are driven by the firm’s ASIC chips.