Nvidia Hits a Sweet Spot, With Both Gaming and Data Center on the Rise

Yesterday, Nvidia announced that its GPUs earned a spot on the top 20 most downloaded games of the month of May, despite the world’s largest game publishers constantly churning out ultra-expensive titles.

At the same time, Nvidia reported record levels of revenue, profits, and revenue from its data center business – a $400 million sector that posted a 24 percent year-over-year gain. The trend is the result of impressive gains in the data center, thanks to Nvidia’s “MillionAI” initiative. According to Nvidia CEO Jensen Huang, that initiative has attained an annual revenue run rate of $400 million – a 30 percent boost since last quarter.

Add in Nvidia’s cryptocurrency investments and you’ve got the beginnings of a potential double-digit repeat performance in the near future.

With the beginning of an era of wildly unpredictable cryptocurrency prices, Nvidia entered the scene to win market share, and it’s appeared to do so. But the question remains: Can Nvidia ever recover from all of its recent cryptocurrency investments?

Cryptocurrency investors have made it clear they’re not ready to give up – and analysts are working on new graphics cards to provide more cost-effective solutions. Remember, Nvidia plays in a video card market that already employs around 30 manufacturers. We’re talking about a brand new video card market here – on an individual basis.

Companies like Asrock, the U.S. subsidiary of Asrock; SanDisk; and Jen-Hsun Huang’s own AI-infused graphics card company, Turing, are all vying for share of what’s expected to be a massive market. NVIDIA, for its part, is making investments in additional new graphics cards, the hope being that some of them can meet what investors believe will be a renewed cryptocurrency market. But for the moment, investors, probably looking out for their own financial future, have a few concerns, including a continually evolving flash card market.

One thing NVIDIA does have going for it is virtual reality, a device where its machine learning expertise and expertise in making GPUs as a low-cost solution stand out. Other graphics card manufacturers have been suffering due to the lack of demand for VR systems, but that’s changed considerably in the last six months.

Virtual reality systems are now being deployed in locations as small as adult stores – and even in movie theaters. Some virtual reality systems are now being installed at an estimated 800 American movie theaters, and with the rise of new applications like smart glasses and head-mounted displays (HMDs), the demand for GPUs is expected to continue.

What lies ahead for the GPU market and Nvidia? The company is counting on its new graphics card model for the AI-infused internet of things.

This is the single thing that, according to Brian Cossman, Senior Vice President of Nvidia’s IoT Business Unit, “will make Nvidia a different kind of IoT player.” In short, Cossman believes the company’s focus on Nvidia IOT card technology will be a key differentiator for Nvidia in 2019.

It looks like Nvidia is on a high right now. If it’s able to continue to grow its market share, coupled with a reinvigorated cryptocurrency market, it could look like a happy tech start-up again very soon.

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