NEW YORK, May 11 — Shares of Nvidia Corp fell 2 per cent today as investors worried that a short-term surge in demand for graphics chips from cryptocurrency miners may be undermining its core business with computer gamers.

Most analysts continued to hold a positive opinion about the stock with at least nine brokerages raising their price targets for Nvidia shares.

Analysts at SunTrust Robinson were most bullish with a price target of US$316. The median price target was US$274 compared to yesterday’s close of US$260.19.

Deutsche Bank analyst Ross Seymore, who has a "hold” rating for the stock, said while the company had beaten expectations, he had reservations about the details.

"While growth remains strong across virtually every segment, the quality of the first quarter beat was somewhat lower,” he said. "Crypto delivered the majority of the upside, while data center was slightly below our estimate.”

Gamers use GPUs to play high-quality video games, but Nvidia’s graphic cards are also used by cryptocurrency miners to build machines to solve the complex math puzzles that earn digital currencies such as Ethereum and bitcoin.

That has pushed up prices of GPUs and also led to a shortage of cards for game enthusiasts who want to install extra processing power.

"Cryptocurrency mining continues to inject noise into an overall very strong growth story, but it should be cleaned up in the next couple of quarters while numbers keep going up,” Morgan Stanley analyst Joseph Moore said.

Nvidia said it made US$289 million in sales, or about 9 per cent of its overall US$3.2 billion in revenue, from chips for mining cryptocurrencies.

The company said its introduction of a crypto-specific GPU called CMP should resolve the tension.

"Channel prices for our GPUs are beginning to normalise, allowing gamers who had been priced out of the market last quarter to get their hands on the new GeForce at a reasonable price,” Nvidia’s Chief Financial Officer Colette M. Kress said.

"Cryptocurrency demand was again stronger than expected, but we were able to fulfill most of it with crypto-specific GPUs.”

Nvidia’s fast-growing data centre business rose 71 per cent to US$701 million in the quarter, but missed analysts’ estimate of US$703 million.

Of the 35 analysts covering the stock, 22 have a "buy” or higher rating; 11 on "hold” and only two on "sell” or lower.

The stock has gained nearly a third of its more than US$150 billion market value this year alone. — Reuters