Daily Brief: Nvidia Wants Crypto Miners To Stop Poaching Its Gaming Chips

Daily Brief: Nvidia Wants Crypto Miners To Stop Poaching Its Gaming Chips

almost 3 years ago3 mins

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US chipmaker Nvidia – which makes microchips for everything from gaming to crypto mining – uploaded an unexpectedly upbeat quarterly update this week.

What does this mean?

With rising demand meeting globally constricted supply, Nvidia was likely able to hike the prices of its products. That might help explain why revenue and profit came in 5% and 12% higher last quarter than investors had predicted.

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Source: The Wall Street Journal

The situation’s set to continue this quarter too: Nvidia reckons revenue will come in around 15% higher than previous analyst forecasts. That’s also down to the dedicated cryptocurrency mining chips the company recently launched, mind you. It’s hoping they’ll stop miners hoarding semiconductors that are intended for gamers – while contributing an additional $400 million worth of sales.

Why should I care?

For markets: There are greater forces at play.

Nvidia’s stock didn’t move much after its earnings announcement. That could be because the chip shortage is nothing new, and investors who have seen Nvidia’s stock soar 25% over the last three months might’ve sold off some of their holdings and banked some of their winnings as others bought in. There’s also the small matter of the firm’s $40 billion purchase of British microchip designer ARM, which is currently undergoing extra UK government scrutiny. The success (or otherwise) of that deal will likely have a much bigger impact on Nvidia’s long-term earnings potential than a few strong quarters.

Nvidia stock
Source: Google Finance

Zooming out: Chipping away at the power conundrum.

Those dedicated crypto mining chips might not fly off the shelves if concerned authorities in China have their way: they’re now taking action against excessive energy consumption in the country’s bitcoin-mining heartland. A lot of this activity could be powered by green energy sources, but the difficulty is getting electricity where it’s needed. If these Chinese crackdowns push more mining to places with greater access to green energy, crypto could go greener too.

Keep reading for our next story...

Investors Gang Up To Make Oil Companies More Green

Oil image

The green revolution continued its uprising this week, as three major oil companies were forced to feel the winds of change.

What does this mean?

It’s been a tough few days for oil companies. First up, a Dutch court stepped in and ordered Shell to start accelerating reductions in its carbon emission. Then Chevron’s shareholders followed up with an uppercut of their own, voting in favor of a drastic cut in its emissions.

Still, maybe the most notable was ExxonMobil, which was put under pressure by its investors to start rolling out a greener agenda. Or more specifically, by one activist investor with just 0.02% of its shares. If you think that doesn’t sound like much, you’re not wrong: investors usually need a much bigger stake to throw their weight around. But despite having no history of activism in the oil and gas industry, this one managed to rally ExxonMobil’s second-biggest shareholder – BlackRock – to its cause, and the rest fell like dominoes.

Collapsing Returns

Why should I care?

For markets: Investors just care too much (about money).

Make no mistake, investors’ sudden enthusiasm for energy companies’ transition to cleaner energy isn’t out of the goodness of their hearts. There’s a financial incentive at play: oil companies could attract a fresh wave of climate-minded investors if their eco-friendly efforts are successful in the longer term, and that could push their share prices up.

Stock struggle

The bigger picture: Making a difference from the inside.

One way for investors to make sure their investments have a positive impact is to avoid those that might have a negative one, but it’s not the only option. Some of the biggest investors in the world use an “engagement” strategy, where they take a big enough stake in dubious companies – poor employers or high polluters, say – to gain a seat at the table. That way, they can use that newfound influence to push them toward positive change.

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