The Need for Fast & Efficient Computing Power
NVIDIA Corporation is the world’s leading provider of graphics processing units, or GPUs. GPUs are processors that are used normally for quick image rendering, and NVIDIA’s GPUs are preferred by gamers for their high performance and 3D graphics.
However, these processors can also be used to improve the efficiency of computers in storing large datasets, allowing them to become the hardware foundation of many intensive computer operations.
GPUs accounted for 87% of NVIDIA’s revenue in 2019, and will be a key driver of NVIDIA’s future growth.
GPUs have become essential in the gaming world, as gamers require the fastest and most sophisticated image-rendering technology. The rise of esports has combined with the current global lockdown to only increase demand for GPUs as NVIDIA has been benefiting from consumer appetite for laptops and gaming hardware.
NVIDIA sells its GPUs to the original manufacturers of PCs and notebooks, such as Dell, HP, Toshiba, and Sony.
NVIDIA also sells its processors to Nintendo who employs these processors in their Switch console.
These companies have been faced with rising demand for fast computing as people are turning to their overloaded home internet systems while forced to remain at home, which in turn has increased the demand for NVIDIA’s products.
Within the GPU gaming market, NVIDIA’s prime competitor is Advanced Micro Devices, or AMD.
Within this space, AMD and NVIDIA are known for pushing different products as AMD has historically aimed to provide the strongest value processors while NVIDIA’s processors are recognized as the most powerful.
This means that demand for NVIDIA’s products will come from those in need of the strongest processing technology and the greatest efficiency, thereby placing the company in a powerful position to take advantage of the need for fast and efficient computing power.
While much of the value of GPUs lies in their graphical power, they are also used in the analysis and storage of large datasets.
NVIDIA has a data center division that utilizes artificial intelligence for accelerated computing and in 2019 they agreed on a deal to acquire Mellanox, a provider of computer chips that facilitate advanced data center connectivity. While this deal is still pending approval, it offers an exciting opportunity for NVIDIA to grow within the AI data center vertical.
NVIDIA CEO Jensen Huang stated that this acquisition will help NVIDIA in “creating next-generation datacenter-scale computing solutions” and this acquisition puts NVIDIA in prime position to serve the fast-growing AI data center market.
All in all, NVIDIA is well-positioned to remain the market leader in the computer gaming processing industry, with GPUs that prove to be the best in the market.
Combined with NVIDIA’s promising potential in the AI data center sphere, NVIDIA is a company primed to continue growing well into the 2020s and beyond. NVIDIA’s revenue grew from $6.9 billion in 2017 to $11.7 billion in 2019, equating to an annual growth rate of 30.6%.
Given NVIDIA’s position in the platforms of gaming and data center, there is still room for even more growth, proving this corporation has tremendous upside.
Written by Ben Stick, Edited by Michael Ding, Bryan Xiao, James Rhinelander & Alexander Fleiss