Below are key drivers of Nvidia's value that present opportunities for upside or downside to the current Trefis price estimate for Nvidia:
For additional details, select a driver above or select a division from the interactive Trefis split for Nvidia at the top of the page.
Nvidia designs and develops Graphics Processing Units (GPUs), which are high performance processors that generate realistic and interactive graphics on PCs. A computer's Central Processing Unit (CPU) off-loads the burden of graphics processing to GPUs. In this way, a dedicated GPU and CPU work in tandem to increase the overall speed and performance of a system. The GPU market is typically segmented into discrete and integrated GPUs. Integrated GPUs, which were once found in the majority of PCs, have been replaced by Intel and AMD's APUs. However, discrete GPUs are preferred by customers such as gamers or design professionals for high performance and 3D graphics. Within discrete GPUs, high-end discrete GPUs form the professional graphics cards market in which Nvidia has a significant market share. Nvidia sells its products directly to PC manufacturers, such as Dell, HP, Toshiba, and Sony. In addition, the company also sells some of its high-end GPUs directly to consumers through retailers such as Best Buy. The company also has a data center division which includes Tesla for AI utilizing deep learning and accelerated computing, leveraging the parallel computing capabilities of GPUs for general purpose computing, and GRID to provide the power of NVIDIA graphics through the cloud and datacenters.
Nvidia also earns revenue from products based on Tegra SOC and modem processor technologies, which includes Tegra for automotive computers, including infotainment and navigation systems; and gaming devices, including Project SHIELD. While mobile computing has been a key focus area and the largest segment for Nvidia’s Tegra business in the last few years, the company claims that automotive and SHIELD (Nvidia’s gaming device) now represent the vast majority of its Tegra revenue. Nvidia expects the two segments to be the biggest growth drivers for its Tegra division.
Graphics Processing Units (GPUs) are the major sources of revenue for the company. GPUs are used by gamers or design professionals for high performance and 3D graphics. Nvidia's GPU lineup includes GeForce for PC gaming, GeForce NOW for cloud-based game-streaming service, Quadro for design professionals working in computer-aided design, video editing, special effects and other creative applications, Tesla for AI utilizing deep learning and accelerated computing, leveraging the parallel computing capabilities of GPUs for general purpose computing, and GRID to provide the power of NVIDIA graphics through the cloud and datacenters.
Nvidia's solid growth for its Tegra Processors segment in the recent quarters can partly be attributed to growth in its SOC modules for consoles, such as Nintendo Switch. Note that Nintendo Switch has been a very successful console, and more than 20 million units have been sold since its launch last year. Nintendo Switch sales are expected to ramp up and reach over 37 million units by March 2019. The console uses Nvidia’s SOC modules, and such growth in the demand for console will bode well for Nvidia.
GPU-accelerated data centers are expanding in both High Performance Computing (HPC) and the cloud, driven by the growth of deep learning and Big Data. GPU’s have become the accelerator of choice for hyper scale data centers due to their superior programmability, competitive performance and power efficiency. The launch of VR can lead to potential growth in the enterprise segment, across multiple industries. Nvidia powers IBM lesson and Facebook’s big source server form Artificial Intelligence (AI). It is present in AI platforms at hyperscale giants such as Microsoft, Amazon, Alibaba, and Baidu for both training and real time influence. Nvidia is engaged with nearly 3,500 companies and organization in the development of the deep learning technology.
The gaming ecosystem and the gaming industry is approximately $100 billion large. Growth in gaming is expected to be fueled by the anticipation of new blockbuster games, the rise of eSports, the emergence of new technologies like virtual reality (VR) and Direct X, and the expansion in developing countries. Nvidia’s gaming platform has been growing at a >25% rate for the last two years. Since Nvidia has not fully penetrated the market, it believes there is ample scope for growth.
Specialty Analytics estimated the market for Advanced Driver Assistance Systems to be worth around $15 billion by 2016, with a CAGR of 23%.(Link) The automotive segment is the fastest growing sub-segment of Nvidia’s Tegra business and offers higher gross margins (compared to devices). The company has been working on building its automotive computing platform for over a decade and is in a strong position to leverage this growth. The company’s automotive platforms remain on a sharp upward trajectory. Nvidia has shipped almost 5-6 million devices for cars (with its Advanced Driver Assistance Systems) and has an additional 20-25 million such devices to ship in its pipeline. In addition to its infotainment cockpit business, Nvidia is working with over 80 companies that are developing self driving car technologies, using NVIDIA DRIVE PX. These include car manufacturers, Tier 1 OEMs, start-ups and research institutions.
Wearable devices, clothing and accessories incorporating computer and advanced electronic technologies, is a subset of the IoT market and is considered to be the next big wave in computing. Juniper Research estimates the wearable computing device shipments to increase to 150 million units by 2018. ABI Research forecast the figure to cross 450 million units . (Link) Gartner estimates the IoT market to grow almost 30 times, from an installed base of 0.9 billion in 2009 to 26 billion by 2020. It will result in $1.9 trillion in global economic value-add through sales into diverse end markets.
Nvidia (NASDAQ:NVDA) is seeing solid growth in its GPUs segment of late, led by higher demand for its GeForce gaming GPUs. However, there has been a significant decline in sales of cryptocurrency-specific products, and there is still excess inventory in the system for these products. ...More
Nvidia (NASDAQ:NVDA) is set to report its Q3 results on November 15, and we forecast a low 20s percent growth in the earnings (y-o-y). We expect both the Tegra Processors and GPU segment to see revenue growth in the high teens. The company has seen massive decline in cryptocurrency GPU sales in the recent past, and this trend will likely continue. ...More
Nvidia's (NASDAQ:NVDA) Tegra Processors segment accounts for around 15% of the company's total revenues, and 10% of the total EBITDA. However, we forecast the contribution to increase in the coming years. The segment revenues have seen strong growth in the recent past led by both Automotive and its SOC (system-on-a-chip) modules for Nintendo Switch. ...More
Nvidia (NASDAQ:NVDA) is seeing solid growth in its GPUs segment of late, led by higher demand for its gaming GPUs. However, there has been a significant decline in sales of cryptocurrency-specific products. This trend will likely continue in the near term. ...More
Nvidia's (NASDAQ:NVDA) key sources of revenues are GPUs (graphics processing units), and Tegra Products. GPUs account for more than 80% of the company's revenues, and more than 90% of the total EBITDA. The GPU segment is benefiting from the gaming business. ...More
Nvidia (NASDAQ:NVDA) has seen solid growth in the recent quarters, led by its GPUs (graphics processing units), and Tegra Processors. The GPU segment is benefiting from the gaming business, which saw a solid 77% revenue growth (y-o-y) in Q1. Nvidia’s gaming platform has been growing at a strong pace since the last few years. ...More
Steam recently conducted a survey that revealed that 85% of gamers on Steam use Nvidia's (NASDAQ:NVDA) discrete GPUs. So why is this survey important? First, Steam is the largest digital gaming distribution platform and therefore, represents a solid sample size. ...More
The market for GPUs (graphics processing units), and discrete GPUs in particular, has been Nvidia's (NASDAQ:NVDA) bread and butter, as the company has garnered a substantial position in this market in the last few years. ...More
Our price estimate for Nvidia (NASDAQ:NVDA) stands at $180, which is meaningfully below the current market price of $230. Last year was an excellent one for the company, as its stock price grew from nearly $106 to more than $190, and the momentum spilled over into January 2018. ...More
Nvidia's (NASDAQ:NVDA) growth, and that of its stock price, has accelerated in the last couple of years. Much of this can be attributed to the expectation that Nvidia will disrupt the data center market, which has been Intel's stronghold historically. ...More
We recently updated our price estimate for Nvidia (NASDAQ:NVDA) to $152. However, the figure still remains meaningfully below the market price, which is touching almost $200. ...More
2017 has been a solid year for many major semiconductor companies, and Nvidia (NASDAQ:NVDA) was no exception. In fact, the company's stock performed significantly better than many of its competitors, growing by nearly 90% year-to-date and adding over $50 billion in value. ...More
There is little doubt that the partnership that Intel (NASDAQ:INTC) and AMD (NYSE:AMD) announced recently is aimed at combating rival Nvidia (NASDAQ:NVDA), which is becoming increasingly competitive. ...More
Nvidia's (NASDAQ:NVDA) stock has been steadily climbing. The company's market value recently reached a record high, with more Wall Street analysts becoming increasingly bullish on the stock. ...More
Nvidia's (NASDAQ:NVDA) market value has increased by nearly 180% in the past 12 months, a staggering rally for a company this size. Its current market cap stands at $108 billion, implying that the company has added nearly $70 billion in market value in the past year alone. ...More
Corporate tax reform was one of the major agendas of President Trump's election campaign. The proposed changes include a significant cut in the current corporate tax rate of 35%, which is among the highest in the world, and lowering the repatriation taxes on cash U.S. ...More
With a more than 200% increase in its stock price in the last one year, Nvidia (NASDAQ:NVDA) has been one of the top performing stocks on Nasdaq. Fiscal 2017 was a good year for the company as it saw a solid 38% growth in revenue and a staggering 171% improvement in net income. ...More
Leading GPU manufacturer, Nvidia (NASDAQ:NVDA), reported its Q1 2018 earnings on May 9th. Continuing the growth momentum from fiscal 2017, the company marked a solid start to fiscal 2018, beating its guidance as well as analyst expectations. ...More
Nvidia (NASDAQ:NVDA) will be reporting its Q1 2018 earnings on May 9th. Fiscal 2017 was a good year for the company as it saw a solid 38% growth in revenue and a staggering 171% improvement in net income. Nvidia's stock price has risen by more than 200% in the last one year. ...More
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. ...More