Wall Street firm Susquehanna has changed the rating of semiconductor firm AMD from neutral to negative and lowered the price forecast for shares in GPU processing manufacturer Nvidia, citing the rising competition from Bitmain’s Ethereum (ETH) mining ASICs, CNBC reports today, March 26.
Susquehanna analyst Christopher Rolland told clients in a note that Bitmain will be shipping an ASIC for mining ETH starting in the second quarter of 2018, adding that although “Bitmain is likely to be the largest ASIC vendor (currently 70-80% of Bitcoin mining ASICs) and the first to market with this product, we have learned of at least three other companies working on Ethereum ASICs, all at various stages of development."
The preponderance of ETH ASIC miners will negatively affect AMD and Nvidia, according to Rolland, companies whose graphics cards for ETH mining make up about 20 and 10 percent of the companies’ respected revenues.
The new target price for AMD shares is $7.50, down from $13.00, and is $200 for Nvidia shares, down from $215 at Friday’s market close. Rolland noted that Nvidia’s neutral rating is the same, because "Nvidia has a stronger and more durable gaming franchise which would help it work through this potential Ethereum-related unwind.”
A research report released in February of this year showed that the four-year-old Bitmain had made between $3 and $4 bln in profits in 2017, while the twenty-four-year-old Nvidia had made about $3 bln during the same time frame.