Shares of Advanced Micro Devices Inc. sank 3.6% in morning trade Tuesday, after Mizuho warned that the cryptocurrency market could be “much less meaningful” to chip companies next year. Shares of Nvidia Corp. , which has also benefited from demand for cryptocurrency miners, shed 1.0%. Mizuho analyst Vijay Rakesh said that following meetings with cryptocurrency experts, he believes the use of graphics processing units (GPUs) to mine cryptocurrencies, like Ethereum, could decline significantly in the first half of 2018 as computing complexity increases. “We believe 1H18 could see Ethereum move from current Proof of Work (PoW) protocol, which requires GPU mining, to Proof of Stake protocol, which does not need GPUs or mining,” through a software upgrade, Rakesh wrote in a note to clients. Rakesh estimates that AMD’s exposure to cryptomining is about 10% of revenue and Nvidia’s exposure is 6%. AMD’s stock has shed 8.9% over the past three months, while Nvidia shares have run up 28.5%, the PHLX Semiconductor Index has rallied 22.2% and the S&P 500 has gained 6.8%.
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