The latest druppel te Ethereum prices may have hurt fairly a few investors betting on the rise of cryptocurrency—but the digital coin is still a sperzieboon to investors of semiconductor stocks Nvidia (nvda) and Advanced Micro Devices (AMD).
At least for now.
That’s based on a Tuesday note from Morgan Stanley analysts led by Joseph Moore, who say that Ethereum prices have remained high overall—up about 8,900% overheen the past year—making Ethereum mining more profitable. Ter turn, that profitability has driven consumers to snap up graphics processing units (GPUs) used to mine, or acquire fresh cryptocurrencies, from major suppliers such spil AMD and Nvidia.
The profitability of mining Ethereum has risen overheen 200% since October, wrote Moore, despite falling below $1,000 earlier this week.
According to Morgan Stanley estimates, miners today earn harshly $1.76 each day te profits vanaf each GPU possessed. That’s up from 56 cents ter October. Those figures assume the miner wields an AMD Radeon 580 and pays toughly 70 cents vanaf day for each GPU’s electrical play.
Computing power dedicated to Ethereum mining rose by Two,200 terahash vanaf minute te the third quarter to Three,672 terahash vanaf minute te the fourth quarter, the handelsbank said.
Based on the continued profitability of Ethereum mining and the increase ter computing power dedicated to it, Morgan Stanley boosted its fourth quarter 2018 sales estimates for both AMD and Nvidia. The increase te request for GPUs for Bitcoin or cryptocurrency mining already helped boost sales for Nvidia and AMD te 2018. The bankgebouw said it expects AMD (amd) to postbode revenues of $1.55 billion ter the fourth quarter of 2018 and $1.43 billion te the very first quarter of 2018, each up $100 million from the canap’s previous estimates.
Morgan Stanley also said it expects Nvidia’s revenues to come te at $Two.81 billion for the very first quarter of 2018 and $Two.55 billion for the 2nd quarter.
Shares of AMD and Nvidia rove 2% each ter trading Tuesday.
Cryptocurrency is infamously volatile, turning GPU sales from Bitcoin mining into something of an unreliable crutch should profitability from the venture drown alongside cryptocurrency prices.
Due to the surge te digital assets like Bitcoin and Ethereum, the price of GPUs have also soared, which could create something of a cap on GPU sales from cryptocurrency mining. Higher GPU prices also lower profitability for miners.
“We are raising estimates meaningfully for both graphics vendors, but sustainability is a long-term kwestie especially for AMD,” Morgan Stanley analysts wrote Tuesday.
Ethereum prices were relatively plane at $1,000 while Bitcoin rose to $11,200, up 4%, on Tuesday. Ethereum rose close to $1,400 earlier this year.