Graphics chipmaker Nvidia reported second quarter sales and profits much better than Wall Street analysts expected on Thursday evening. But instead of pushing Nvidia’s stock price, already up 54% this year, even higher, the numbers sent the price tumbling almost 8% in after hours trading.
The problem might be called the fear of a big cryptocurrency bust.
Users of digital currencies have been buying up thousands of graphics cards from Nvidia (NVDA) (and AMD (AMD) too) to use in computers that process transactions and create more crypto cash coins. That helped bolster sales of Nvidia’s traditional graphics card line, for which sales rose 52% to $1.2 billion.
But Wall Street thinks the cryptocurrency-driven sales boom won’t last. Bitcoin’s price has been surging in recent months, hitting an all-time high over $3,500 earlier this week, more than triple the level at the beginning of April. Kind of like the price of oil driving more drilling activity, the higher the price of bitcoin, the more bitcoin transaction processors can spend on computer equipment to calculate more quickly—and make themselves more money in the process.
(Update: Many bitcoin miners have shifted from using graphics cards to systems that rely on more specialized chips known as application-specific integrated circuits, or ASICs, not made by Nvidia. But with the price and popularity of follow-on digital currencies like Ethereum also booming, the market for graphics cards to mine those coins remains strong.)
So if cryptocurrency prices drop, graphics card buying could dry up in a hurry, investors worry. Analysts raised the same concerns after AMD ‘s results last month, as well.
Nvidia CEO Jensen Huang tried to argue that the cryptocurrency boom had legs. In addition to bitcoin, new digital currencies have been minted that have also grown quickly in popularity and some startups are issuing their own digital tokens in lieu of tapping venture capital.
Get Data Sheet, Fortune’s technology newsletter.
Predicting the market for graphics cards in cryptocurrency would grow “quite large,” Huang said the sales were “not likely to go away anytime soon. There will be more currencies to come–they will come from different nations.” And, he added: “We have the ability to rock and roll with this market as it goes.”
Overall, Nvidia reported revenue jumped 56% to $2.2 billion, a quarterly record and more than the $2 billion Wall Street analyst had expected. Earnings of 92 cents a share also beat analysts’ 70 cent estimate, the company’s eighth beat in a row.
But while revenue in the traditional graphic card business came on strong, the other problem for investors was in the company’s fast-growing data center business. Businesses and cloud data center owners are adding graphics cards to their servers to perform artificial intelligence and machine learning tasks more quickly than traditional central processor. And at the beginning of the quarter, Nvidia rolled out its new Volta chip providing performance 100 times faster on AI jobs than its previous generation of chips.
But despite the new Volta-based cards, sales in the data center increased only 2% from the first quarter to $416 million (although that still represented an impressive 175% increase from a year earlier). Some analysts and the CEO suggested that customers might have delayed purchases as they awaited better Volta availability or new server CPU chips from Intel (INTC).
The second quarter was a “transition quarter” for the business, Huang said. “I thought we did great…we ramped Volta into volume production,” he added without getting more specific about the sales.
The stock price drop also came after several prominent Wall Street warnings issued about Nvidia’s prior rapid rise. Before the earnings release, Bernstein Research analyst Stacy Rasgon warned of a “need to be prepared for volatility, exacerbated by the strong run in the stock in recent weeks and months.” And famed short seller Andrew Left of Citron Research said earlier on CNBC that he was betting against Nvidia because “the stock has run way too far, too fast.”
(This story was updated August 11 to add a reference to Ethereum and other digital currencies)
