Originally Posted by Aemonn
I think people are confusing channel stock with reporting of revenue. The argument here is only partially related to stock, or volume of sales. We all know how many cards nvidia sold. It's that they misrepresented the number of sales, and revenue generated that was associated with crypto. Investors were under the impression that sales would not tank as much as they did since some believed there was demand outside of crypto that was driving sales, when in reality it was crypto.
The stock price soared from $90 - $260+ based on the constant beats on quarterly reports showing massive revenue growth. The premise was that this was due to datacenter growth, AI, autonomous driving, growth in gaming and crypto. Nvidia gave investors guidance on what percentage of their revenue fell into each of those categories. When the crypto bubble burst as ASIC were released that displaced GPU's the contribution to that revenue growth from crypto would disappear. Nvidia communicated that the % of that revenue growth from 2016-early 2018 was much smaller than it was in reality. That is why people are pissed.
On several earnings call Nvidia stated that the crypto impact would be small. Now, through analyzing AMD earnings, channel inventory, the timing of the release of ASICS that displaced GPU mining, etc it is becoming more clear that a drastically larger percent of Nvidia's revenue growth was directly tied to crypto and not the other forms of revenue.
Whether this was known by Nvidia or simply a result of a hard to track market (it's hard to tell what someone is using a GFX card for when they buy it) is unknown. If gpu mining were still a strong and stable business none of this would matter. But the crypto bubble burst and it took 3-4 quarters for things to settle. In that time Nvidia gave investors a false accounting for just how much crypto was a part of their revenues and how much those revenues would be adjusted down as a result.
At least that's how I understand it.
While this could be, there are also a lot of things that could interfere with that assumption.
First off, nvidia claimed, that they lost revenue by not selling GPUs in Q3, because of crypto "hangover" (and they blamed AMD as well if you remember). They claim that they got stuck with 1.4B$ of inventory in Q3.
That wouldn't make sense really, if the claim that they kept on selling cards in the billions.
Secondly, the premise does not take into account AMD's rebrands and reducing prices. If AMD indeed dumped a load of 580s into the market, at MSRP or lower, they could have made those extra revenue the analysis claim off the normal market, and not crypto market.
Remember that he based his claims on sales made by AMD, not crypto specific sales, he based his numbers on crypto currency made, could be on coins that favoured AMD (like ethereum, so the math about what was bought, could be wrong).
Without real numbers (which none are willing to reveal), you can't really tell where is it coming from. Could be that nvidia really lied, or could be that they really did sell more desktop, because you could more easily find a GTX card than a RX during most of the year.