Nvidia Q4’16 Earnings Driven By An Enhanced Interest In Deep Learning

by Trefis Team
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Leading GPU manufacturer, Nvidia (NASDAQ:NVDA) reported its Q4’17 results on February 9th. Though there hasn’t been any significant sequential growth in Nvidia’s key metrics, the company’s growth has been strong on a year over year basis. The company posted revenues of $2.2 billion and gross margins of 60%, which translates to a 55% and 3 percentage points year over year increase in the metrics, respectively. Nvidia registered strong double digit growth across its four key platforms – Gaming, Professional Visualization, Datacenter and Automotive.

It is worth noting that the expansion of Nvidia’s deep learning platform beyond training to speed up AI inferencing production workloads in hyper-scale data centers and Automotives is clearly paying off. The company’s focus on driving its GPU compute platforms into highly targeted markets is enabling it extend its leadership across the segments.

Towards the end of Q4, Nvidia launched a few major products – the mobile versions of their GTX 1050 and GTX 1050 Ti , G-SYNC HDR, which enhances the gaming experience and Quadro GP100, which creates a new supercomputing workstation. We believe these product launches should help the company retain its growth momentum going forward. Furthermore, the company is likely to witness stronger demand for its GPUs as enterprises in the fields such as healthcare, retail, transportation, and finance adopt deep learning on GPUs to make run time of their applications faster.

Key Highlights For Q4’17 Earnings

  • Gaming revenue grew 66% year over year to $1.35 billion, mainly driven by the integration of Pascal-based GPUs.
  • Quadro revenue was up 11% year over year to $225 million, which was driven by demand for high-end, real-time rendering and mobile workstations. Pascal is in the process of ramping into workstations all over the world and we expect growth to remain strong in the coming quarters as well.
  • At $296, Nvidia’s data center revenue tripled year over year, on account of strong growth in supercomputing, hyperscale datacenters and grid virtualization.  Interest in deep learning is surging as industries and basis researchers increasingly seek to harness this revolutionary technology. Deep learning will continue to fuel growth going forward as well, as Nvidia is at the forefront of the technology.
  • Automotive revenue reached a record $128 million, increasing 38% year over year, which has likely been its DRIVE PX 2 automotive supercomputer. In Q4, Tesla rolled out the new autopilot system based on the NVIDIA DRIVE PX 2 platform for every new Model S and Model X.

We are in the process of updating our valuation for Nvidia.

See our complete analysis for Nvidia

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