Nvidia stock has more than doubled YTD. What are they producing these days? Can't be a lot of growth in the PC 3D cards market right?
They had phone ambitions but never made it anywhere.
They are producing chipsets for cars but the world isn't exactly teeming with self-driving cars. Now they may be using Nvidia chips to control the dash display, like Audi does I believe. But that's not a fast-growing market either, car sales in general and high-end cars in particular.
So what are they so busy with that they couldn't knock off a new Switch SOC, though as successful as the Switch was, I'm guessing it didn't materially boost Nvidia's finances.
OK quick search, I found that Nvidia passed the market valuation of Intel when it's stock was $420, now it's $550.
For the first time, revenues from data center sales outpaced gaming hardware sales.
Meanwhile it has growing software sales tied to subscriptions:
The company is not yet ready to break out software sales and operating profits into separate line items in its quarterly reports. Instead, we have to look for clues like management comments in order to see the business category gaining momentum.
The software sales largely fall into three separate buckets.
- AI: NVIDIA supports several software frameworks for artificial intelligence (AI) number-crunching, all optimized to take full advantage of GeForce graphics chips and Tesla (NASDAQ:TSLA) high-performance computing processors. The NVIDIA DIGITS neural network training system is an in-house solution for which NVIDIA offers enterprise-grade support services.
- Self-driving cars: The NVIDIA DRIVE AGX Orin platform is a self-driving car system that's both built around NVIDIA's high-performance math processors and designed like a modular software product. Upgrades, bug fixes, and new features can be added through over-the-air software updates, and many features are available under subscription-style licensing terms. The Mercedes-Benz division of German automaker Daimler AG (OTCMLR.Y) (OTCDAI.F) recently committed to a DRIVE AGX partnershipthat will put NVIDIA-powered Mercedes cars on the road by 2024.
- Data center networking: Through the recent acquisitions of Mellanox and Cumulus Networks, NVIDIA has become a significant force in the market for software-defined data center networks. This ultra-flexible network management approach comes with multiyear license and support agreements, pushing NVIDIA even further into the realm of software-based business.
OK, I can see the association with Tesla, whose own stock is going crazy, probably uplifts Nvidia.
Self-driving cars are mostly hype, nobody expects level 4 or 5 for at least a decade.
Data center, I can see, with the hype of the cloud.
Nvidia charges for AI frameworks which are meant to spur sales of its silicon? Nice business model.
Maybe Nintendo will have to pay a lot to get Nvidia to dedicate resources to making a bespoke chip. With high-flying stock, Nvidia shouldn't have problems attracting and retaining talent but console gaming may be far down their list of priorities.