The sustainability of blockchain technology is remarkable, yet its adaptability and mobility are even more impressive. This year, blockchain has become a major focus, fueling a market surge that's capturing the attention of investors and industry leaders alike. Companies like AMD and Nvidia are seeing promising opportunities as demand for high-performance GPUs rises in the blockchain space.
According to recent reports, AMD's quarterly revenue has been impressive, with its chip sales becoming a key component for blockchain technology providers. As a decentralized digital ledger, blockchain has expanded beyond just cryptocurrencies, experiencing explosive growth in various sectors.
Blockchain is the foundational technology behind Bitcoin and Ethereum, and cryptocurrency miners rely on fast graphics processing units (GPUs) to solve complex mathematical problems in exchange for new digital currencies. Both AMD and Nvidia are set to release their earnings reports next week, and given the current trend, their GPU sales could see significant gains if prices continue to rise.
Analysts expect both companies to experience further growth as more global businesses invest in the Bitcoin industry or adopt blockchain technology. The rising demand for GPUs has already started to impact the market, with investors showing excitement about the future.
On Wednesday, AMD shares increased by around 6%, while Nvidia's stock rose by 3%. In 2017, Bitcoin's popularity surged over 1,300%, drawing more users worldwide and increasing the demand for GPUs. Initially, AMD and NVIDIA tried to downplay the potential revenue from cryptocurrencies, but analysts now believe the blockchain market is here to stay.
Kevin Cassidy from Stifel noted, "We believe that the larger blockchain ecosystem represents a sustainable GPU market, and it will eventually evolve into specialized application-specific integrated circuits (ASICs) for blockchain use." He added, "Both AMD and NVIDIA may benefit from this, at least through intellectual property rights related to ASICs."
Although blockchain is most famously associated with Bitcoin, an increasing number of industries are adopting it to enhance security and operational efficiency. For example, De Beers uses blockchain to verify the authenticity of diamonds.
John Pitzer from Credit Suisse stated, "While some may discount the long-term benefits of crypto technology, we believe blockchain is more sustainable than many other technologies." He estimated that AMD sold approximately $320 million in chips to blockchain companies in 2017, though this represented only a small portion of the company’s total annual revenue, which exceeded $5 billion.
During Tuesday’s earnings call, AMD CEO Lisa Su mentioned that although the blockchain market is highly liquid and dynamic, the company’s growth momentum in December was strong and continued into the first quarter of this year.
Nvidia, AMD’s main competitor, is scheduled to announce its fourth-quarter earnings on February 8. In October, the company reported quarterly revenue exceeding $100 million, signaling continued strength in the market.
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