Nvidia to Continue Dominating

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With AI taking off, Nvidia’s pioneering efforts in the accelerated computing space are paying off. Today, Nvidia’s platform is used by 4.5 million developers and powers 76% of the TOP500 supercomputers. The company recently announced very strong quarterly results.

Nvidia’s Financials

Nvidia’s third quarter revenues grew a jaw dropping 206% to $18.12 billion, ahead of market estimates of $16.18 billion. Non GAAP EPS was $4.02, also ahead of market estimates of $3.37.

By segment, data center revenues grew 279% to $14.51 billion. Gaming revenues grew 81% to $2.86 billion. Professional Visualization revenue grew 108% to $406 million. Automotive revenue grew 4% to $261 million.

For the fourth quarter, the company forecast revenues of $20 billion or 231% growth, while the consensus estimate is at $16.06 billion.

Nvidia’s Data Center Growth

Nvidia’s Data Center segment powered its growth this quarter. It has leading cloud service providers such as Amazon and Google as its clients. During the quarter, Google Cloud Platform made generally available new A3 instances powered by NVIDIA H100 Tensor Core GPUs and NVIDIA AI Enterprise software in Google Cloud Marketplace.

During the quarter, Nvidia announced the NVIDIA HGX? H200 with the new NVIDIA H200 Tensor Core GPU, the first GPU with HBM3e memory. The current H100 GPU which costs about $40,000 is already in huge demand. H200 systems are expected to be available in the second quarter of next year.

It also announced that Microsoft Azure will be offering customers access to NVIDIA Omniverse? Cloud Services for accelerating automotive digitalization, as well as new instances featuring NVL H100 Tensor Core GPUs and H100 with confidential computing.

Nvidia’s AI Offerings

Nvidia recently introduced an AI foundry service to accelerate the development and tuning of custom generative AI applications, which will first be available on Microsoft Azure. The AI Foundry service uses NVIDIA AI Foundation Models, NVIDIA NeMo? framework, and NVIDIA DGX? Cloud AI supercomputing. SAP and Amdocs are among the first customers.

It has partnered with a range of leading companies on AI initiatives, including Amdocs, Dropbox, Foxconn, Genentech, Infosys, Lenovo, Reliance Industries, Scaleway, and Tata Group.

Analysts are bullish on Nvidia’s prospects despite some concerns on export restrictions that can limit sales of its GPUs in China. It also faces competition from AMD. However, GPU demand far outstrips the demand and Nvidia is expected to continue to dominate the market with over 85% share even in 2024.

Nvidia is currently trading at $483.45 and a market capitalization of $1.19 trillion. It reached a 52-week high of $503.66 in August and a 52-week low of $108.13 in October of last year.

Disclosure:?All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

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