AMD Ethereum miners are renting Boeing 747s to ship graphics cards and AMD shares are soaring

Discussion in 'Latest Hardware News' started by Jack, Jul 28, 2017.

  1. Jack

    Jack Administrator
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    Advanced Micro Devices’ (AMD) share price jumped after it beat revenue estimates thanks to cryptocurrency miners snapping up the firm’s graphics cards. Shares rose 11% after the chip company announced earnings on July 25, but the firm’s stock is up 152% over the last 12 months, making it the fourth best performer on the S&P 500, CNBC reported.

    Lisa Su, AMD’s chief executive, said the firm saw “elevated demand” from cryptocurrency miners during the quarter. This need for graphics cards helped AMD give a “solid beat” to analyst estimates, said Kevin Cassidy of Stifel, who covers AMD’s stock at Stifel Financial Corp.”While management wasn’t specific on how much, the [graphics processor unit] revenue upside was driven by cryptocurrency applications.”

    Crypto miners—in particular those mining ethereum, the second largest cryptocurrency by market valuation behind bitcoin—have been in the crypto equivalent of a gold rush since early this year. They are racing to take advantage of ethereum’s exploding price by adding more processing power to their mines. Some of them are even resorting to leasing Boeing 747s to fly the increasingly scarce graphics processors from AMD and Nvidia directly to their ethereum mines so they can be plugged in to the network as quickly as possible.

    “Time is critical, very critical,” in mining, Marco Streng, chief executive of Genesis Mining, a major ethereum miner, told Quartz. “For example, we are renting entire airplanes, Boeing 747s, to ship on time. Anything else, like shipping by sea, loses so much opportunity.”

    Up for grabs is a supply of roughly 36,000 units of new ether, the digital token associated with ethereum, per day. At current prices of around $200 per ether, that translates to $7.2 million worth of ether that miners compete for each day.

    “When building our data centers, we have the highest priority on time,” Streng said. “Time counts so much. We are using the fastest delivery possible. You risk the opportunity to mine for the days you are delayed. If you are deploying 10 days later, you are losing 10 days of mining—that is the cost.”

    To make money, miners must buy GPUS (graphics processing units) from AMD or Nvidia, then pay the costs of electricity and labor to run them, and maintain giant warehouses to store the machines. In return, miners get a supply of ether each day if they possess sufficient processing power. Because their costs have remained stable while ether’s price has surged from around $10 at the start of the year to a high of $400 in June, miners’ potential profits have increased 40-fold.

    “Everyone began to realize this and wanted to get GPUS to get mining. This created an absolute shortage in the market,” Streng said. “The mining gear has a certain price. And suddenly the price of coins goes from $10 to $400—so a factor of 40. The mining return has gone up by 40 but the hardware is still the same cost. This creates an incredible economic incentive for people to start mining.”


    Read more: Ethereum miners are renting Boeing 747s to ship graphics cards and AMD shares are soaring
     
  2. SHvFl

    SHvFl Level 32
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    #2 SHvFl, Jul 28, 2017
    Last edited: Jul 28, 2017
    And all of us that just want a graphic card to play a game have to pay premium because this asshats buy all the supply and we are stuck with crap they don't want. Thing is this operation will just switch to another coin if Ethereum goes bust so our option are limited. Either nvidia and amd expand production or we are going to see higher prices eventually.
     
  3. cruelsister

    cruelsister Level 32
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    The gains for AMD stock are even more massive if you go back a little bit more than a year. In February 2016 AMD was trading for a bit less than 2 USD/share. After earnings release the other day it topped out at a bit over 15 USD, but has dropped a bit especially as Intel had excellent numbers.

    What will be interesting is to see how both the new Intel (Xeon Skylake) and the AMD (EPYC 7000) server chips compare in sales over the next 3 months.
     
  4. Dean Winchestere

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    #4 Dean Winchestere, Jul 29, 2017
    Last edited by a moderator: Jul 29, 2017
    I think the idea of crypto is amazing, but this is affecting the real economy, wasting electricity. What are these asshats gonna do when etherium switches to proof of stake? Or perhaps crashes because of BTC? I think anyone buying $500 gpus just for mining is a complete idiot. AMD is quite smart though, sell them shovels even tho all the gold is gonna be gone.

    On a side note: How long until intel pays the eth founders to switch to proof of stake to crash AMD stock?
     
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  5. Lockdown

    Lockdown From AppGuard
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    If you did the same type of thing in an SEC regulated market, then you would be sent to prison. The Hunt brothers did and ultimately were sacked and sent to the "klink" (= the sound of a prison door shutting).
     
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  6. cruelsister

    cruelsister Level 32
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    Dean- I dumped my AMD at 15.
     
  7. mekelek

    mekelek Level 21

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    you should be mad at the manufacturer for not being able to keep up with the demand..
     
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