NVIDIA Corporation (NASDAQ:NVDA) Crypto Rival Has Morgan Stanley Worried


Although NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD) have been have been the most preferable chip makers sought by digital tokens miners in the market, Bitmain Technologies has launched a high performing semiconductor that is likely to take a portion of the market. Known as the Antminer E3 chip, its price as well as performance is giving Morgan Stanley analyst Joseph Moore a lot of worry. The chip, which is a product of Bitmain Technologies from China is expected to launch in the market in July and will retail at around $800.

According to the analyst, although this was expected, the capability of the new chip is way beyond what many expected. It comes with hash rate 7.5x graphics cards, which goes for $800 around 5.7x power consumption. The analyst says the superior economics is like to cause a drop in the mining profits obtained from graphics chips. Additionally, the launch of the semiconductor may solve the problem of shortage of crypto graphics. The analyst says although both companies will see a drop in the demand of graphic chips, AMD will feel the effect more than Nvidia.

The analyst who has a heavy weighting for both AMD and Nvidia says the two companies will have to shift attention to other high-growth areas of the market. One of these areas is artificial intelligence where Nvidia has been a leading player. Hans Mosesmannn, an analyst at Rosenblatt Securities said that the advances made by Nvidia in the sector will allow it to shift attention to AI.

Moore is not the only Wall Street analyst who is worried of Bitmain’s mining chip. Mitch Steves, an analyst at RBC Capital, in a note to clients who are covered by Barron’s that the new chip will many buyers of Nvidia GPU chip. He noted that majority of Nvidia’s graphics chips buyers use them for cryptocurrency mining.

The launch of the new chip comes at a time when leading cryptocurrencies are experiencing a fall in prices since their exponential rise in 2017. However, even with the falling prices, demand for graphics cards for cryptocurrency mining has gone up. This is has led to a sharp shortage in chip.