{"id":189565,"date":"2021-02-26T15:23:00","date_gmt":"2021-02-26T12:23:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/"},"modified":"2021-02-26T15:23:00","modified_gmt":"2021-02-26T12:23:00","slug":"opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/","title":{"rendered":"#\n  Opinion: Nvidia\u2019s future is bright as its many bets are paying off"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3bbffec19f9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3bbffec19f9\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#The_company_is_known_for_gaming_chips_But_other_business_segments_are_growing_rapidly\" >The company is known for gaming chips. But other business segments are growing rapidly.<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#Gaming_is_the_anchor\" >Gaming is the anchor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#AI_sets_the_pace_for_data-center_growth\" >AI sets the pace for data-center growth<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#Bets_tied_to_the_momentum_of_EV_and_crypto\" >Bets tied to the momentum of EV and crypto<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#Reason_for_optimism_on_Arm_deal\" >Reason for optimism on Arm deal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#Ticking_all_the_boxes\" >Ticking all the boxes<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-nvidias-future-is-bright-as-its-many-bets-are-paying-off\/#Daniel_Newman\" >Daniel Newman<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: Nvidia\u2019s future is bright as its many bets are paying off<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"The_company_is_known_for_gaming_chips_But_other_business_segments_are_growing_rapidly\"><\/span>\n  The company is known for gaming chips. But other business segments are growing rapidly.<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000179366\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Nvidia\u2019s fourth-quarter revenue topped $5 billion for the first time, c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing a stellar year for the chipmaker despite the global pandemic and supply-chain constraints. <\/p>\n<p> Still, the company\u2019s shares slumped Thursday as rising interest rates dinged <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> stocks. <\/p>\n<div class=\"paywall\">\n       While the reaction to the strong results was baseless, Nvidia has been able to deliver <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">trip<\/a>le-digit returns to investors in the past year, begging the question of whether this moment can continue.<\/p>\n<p>I believe the answer to be a resounding \u201cyes\u201d based on the company\u2019s two core business units, gaming and data center, which are gathering momentum. There is a potential force multiplier of growth from Nvidia\u2019s other big bets, including automotive, gaming and its ambitious deal to acquire Arm.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Gaming_is_the_anchor\"><\/span>Gaming is the anchor<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Gaming has steadily accounted for around 50% of Nvidia\u2019s revenue. In the latest quarter, sales in that segment surged 67% to $2.5 billion. The company has become synonymous with the most desirable graphics cards for gaming and has built on that franchise by putting its expansive artificial intelligence (AI) and ray tracing capabilities into its products to drive even more immersive experiences and loyal <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>rs consuming its products.\u00a0<\/p>\n<p>The new GeForce RTX 30 <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">Series<\/a> have sold at a rate that outpaces the company\u2019s ability to deliver based on semiconductor production constraints, but this also means there is still unmet demand that can drive further growth as the chip shortage subsides. Add in the GeForce Now streaming service that was recently rolled out by the company and gaming has a new source of recurring revenue and a new place for loyal Nvidia gamers to invest in the growth of its gaming segment. GeForce has now seen sizable demand, including 6 million registered users and over 200 million hours streamed in 2020.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"AI_sets_the_pace_for_data-center_growth\"><\/span><strong>AI sets the pace for data-center growth<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>While gaming has been the anchor of the company\u2019s growth, data center has been the accelerant leading to continuous quarters of high double- and triple-digit growth. In the fourth quarter, data-center revenue doubled, and sales totaled $6.7 billion for the year. It\u2019s important to note Mellanox contributed 10% in the fourth quarter, which was up 30% year over year. However, even without Mellanox, this part of the business was accelerating quickly, and Mellanox provides another growth mechanism.<\/p>\n<p>Much of the data center business\u2019s strength has been attributed to strong demand and market acceptance of its new Ampere architecture, with enterprise AI adoption taking hold. This has been key in enabling the company to shift its strength in AI training to take advantage of the growing demand for AI inference. These applications have strengthened the demand for Nvidia data center technology, which was also bolstered by the company\u2019s investments in key frameworks for recommendation engines (Merlin) and conversational AI (Jarvis).<\/p>\n<p>Effectively, Nvidia is tied into AI in such a way that as demand grows for applications to leverage GPUs for acceleration, its data center business will see commensurate growth.\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.grandviewresearch.com\/press-release\/global-artificial-intelligence-ai-market\" class=\"icon none\">Research\u00a0<\/a>shows this market will reach over\u00a0$727 billion\u00a0and a 47% compound annual growth rate (CAGR) over the next six years.\u00a0<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Bets_tied_to_the_momentum_of_EV_and_crypto\"><\/span><strong>Bets tied to the momentum of EV and crypto<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The company\u2019s automotive number has been somewhat underwhelming in recent periods, and these results have been papered over by the performance of the above-mentioned key segments. However, there are indicators that the automotive business could be in for a reversal of fortune as it is now able to tout a multibillion pipeline for self-driving and AI cockpit. This capability represents a significant growth area and now drives about two-thirds of the company\u2019s automotive revenue.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Nvidia is seeing its automotive tech being included, or planned for inclusion, in several key Chinese EV makers, including Li Auto<br \/>\n        LI,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/219811686\/composite\" class=\"negative\">-9.80%<\/bg-quote><span>,<\/span><br \/>\n       XPeng<br \/>\n        XPEV,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/219982686\/composite\" class=\"negative\">-8.55%<\/bg-quote><br \/>\n       and Nio<br \/>\n        NIO,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/204905836\/composite\" class=\"negative\">-9.74%<\/bg-quote><span>.<\/span><br \/>\n       The three automakers doubled sales in 2020 and now have a combined volume of about 100,000 vehicles.\u00a0\u00a0<\/p>\n<p>Mercedes Benz saw its MBUX platform, which was built with Nvidia, installed in over 1.8 million cars and is being extended throughout its line.<\/p>\n<p>Cryptocurrency is also playing into the overall trajectory of Nvidia. Just ahead of Wednesday\u2019s earnings, the company announced its new CMP line of specialized cards for crypto mining. I put this as a small, but material, bet that the company estimates could generate $50 million in the next quarter. However, with crypto gaining momentum and Nvidia being especially well suited to Ethereum<br \/>\n        ETHUSD,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/108573964\/realtime\" class=\"negative\">-2.12%<\/bg-quote><br \/>\n       mining, which sits today as the No. 2 cryptocurrency.<\/p>\n<p>With the rollout of the CMP solution, the company will now have a better ability to tabulate and track its use for crypto mining. I also believe that it will be able to monetize some fallout silicon that doesn\u2019t pass GeForce gaming factory testing. This more acute focus has the potential to aid in new product development that could see this scale to be more than a $50 million per-quarter opportunity.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Reason_for_optimism_on_Arm_deal\"><\/span>Reason for optimism on <strong>Arm deal<\/strong>?<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The pending acquisition of Arm is driving even more buzz around Nvidia as investors are beginning to fully understand the implications that this acquisition will have for Nvidia\u2019s long-term trajectory. It provides a massive opportunity for Nvidia to compete in the multibillion-dollar datacenter and PC CPU business while also providing it a vehicle to license its technology into new architectures that could diversify and scale Nvidia\u2019s revenue streams.<\/p>\n<p>I remain steadfast in saying that this will be a complicated transaction that will all but certainly face legal challenges and regulatory scrutiny, which we began to hear more about this past quarter, including the\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.windowscentral.com\/microsoft-google-and-qualcomm-complain-us-antitrust-regulators-regarding-nvidias-purchase-arm\" class=\"icon none\">alleged complaints<\/a>\u00a0that came from Qualcomm<br \/>\n        QCOM,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/206679220\/composite\" class=\"negative\">-3.95%<\/bg-quote><span>,<\/span><br \/>\n       Microsoft<br \/>\n        MSFT,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/207732364\/composite\" class=\"negative\">-2.37%<\/bg-quote><br \/>\n       and Alphabet<br \/>\n        GOOG,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/205453964\/composite\" class=\"negative\">-3.05%<\/bg-quote><span>.<\/span><br \/>\n       However, there are no strong indicators at this point in time to suggest it won\u2019t be completed. What Nvidia really needs to do is convince the markets this is good for the broader ecosystem and consumer.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Ticking_all_the_boxes\"><\/span><strong>Ticking all the boxes<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>The company put revenue guidance for the first quarter of its new fiscal year for a modest jump from just over $5 billion to $5.3 billion. On the heels of another record-breaking revenue quarter, this is a clear sign of optimism from Nvidia. Its core segments will anchor those results. However, the bigger trajectory and my bullish sentiment that Nvidia\u00a0could reach a trillion-dollar valuation\u00a0will require the company to check all the boxes, which will also require growth across the portfolio, and it will need to find a way to get the Arm deal done \u2014 which is entirely possible but should not for a moment be taken for granted.<\/p>\n<p><em>Daniel Newman is the principal analyst at\u202f<\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/futurumresearch.com\/\" class=\"icon none\"><em>Futurum Research<\/em><\/a><em>, which provides or has provided research, analysis, advising, and\/or consulting to Nvidia, Intel, Salesforce, IBM, Microsoft, Amazon, Oracle and dozens of companies in the tech and digital industries. Neither he nor his firm holds any equity positions with any companies cited. Follow him on <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a>\u202f<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/danielnewmanuv\" class=\"icon none\">@danielnewmanUV<\/a>.<\/em><\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Daniel Newman\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Daniel_Newman\"><\/span>Daniel Newman<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=21005575-02D4-D4B5-4572-D2BCA6A32767&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Opinion: Nvidia\u2019s future is bright as its many bets are paying off &#8221; The company is known for gaming chips. But other business segments are growing rapidly. Nvidia\u2019s fourth-quarter revenue topped $5 billion for the first time, capping a stellar year for the chipmaker despite the global pandemic and supply-chain constraints. Still, the company\u2019s&#8230;<\/p>\n","protected":false},"author":1,"featured_media":189566,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-189565","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/189565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=189565"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/189565\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/189566"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=189565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=189565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=189565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}