Nvidia Has A GPU Business, And It’s Big

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Nvidia’s (NASDAQ: NVDA) total revenue has grown from $9.71 billion in 2018 to $10.92 billion in 2020, and is expected to further grow to $13.10 billion in 2021. Nvidia’s GPU segment is expected to make 87% of the $13.10 billion in Nvidia’s expected 2021 revenues, while also being key to Nvidia’s revenue growth. GPU segment is expected to be the single-biggest revenue driver with $11.36 billion in revenues (87% of Total Revenue), which is expected to be 6.5x the size of its Tegra Processors revenue in 2021.
GPU segment, which includes GPUs sold for consumer and professional PCs, and data centers, will be the fastest-growing segment – adding $3.18 billion over 2018-2021 (94% of the $3.39 billion in incremental revenues).
Furthermore, total revenue should rise to around $15.07 billion by 2022, driven by the company’s new Turing products, and a revival in data center demand.

In our interactive dashboard Nvidia Revenue: How Does Nvidia Make Money?, we discuss Nvidia’s business model, followed by sections that review past performance and 2022 expectations for Nvidia’s revenue, including comparisons with close competitors, Intel and AMD.

A look at Nvidia’s segments and their contribution to total revenue

(A) GPU revenue to grow by $3.6 billion over the next 2 years, to make up 87% of total revenue in 2022

  • GPU revenue grew from $8.18 billion in 2018 to $10.18 billion in 2019, and was the primary driver of Nvidia’s revenue growth.
  • However, GPU revenue dropped to $9.46 billion in 2020, under pressure from low PC and notebook sales, and a slowdown in data center demand.
  • However, things should get better by 2021, and we expect revenue in 2021 to come in at $11.36 billion.

(B) Revenue from the Tegra Processors segment to grow by $550 million over the next 2 years, to make up 13% of the total revenue estimate

  • Revenue from this segment has dropped from $1.53 billion in 2018 to $1.45 billion in 2020.
  • Revenue from Tegra Processors came under pressure in 2020, due to a slowdown in the Chinese economy (around 25% of Nvidia’s revenue comes from China).
  • However, by 2022 this metric could grow to $2 billion on the back of growing demand for gaming consoles.

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