It doesn’t look like NVIDIA’s (NVDA, Financial) mesmerizing growth will stop soon. NVIDIA has performed terrifically over the last few quarters, and the company has managed to defy all growth expectations. Credit should be given to the company’s management that has led to this growth despite the slowing PC market.
Investors can count on NVIDIA’s management to continue growing even as its graphics card growth saturates. NVIDIA has many opportunities going forward, one of them being autonomous cars.
Autonomous car development platform
NVIDIA has grasped a robust position in the GPU market. Along with this, the company is also aggressively focused on an autonomous car development platform. NVIDIA recently launched Drive PX 2, which is being used by more than 80 auto manufacturers and automotive dealers. NVIDIA’s Drive PX2 can process up to 24 trillion operations per second and learns grounded on its experience.
Furthermore, NVIDIA also introduced cloud-based supercomputer titles as DGX-1 that can be used as a server for processing real-time autonomous card data in alliance with the Drive PX-involved system. NVIDIA is the leader in the industry, mainly due to the enhanced version of the Drive PX.
Another company followed by NVIDIA is NXP Semiconductors (NXPI, Financial). NXP sold 30 million processors to car manufacturers for their progressive driver assistance systems, and almost eight out of the 10 manufacturers use its ADAS processors.
Driver assistance system is placed at the core of driverless systems as these technologies, such as assisted braking, etc., are the most significant parts of autonomous systems. With NXP formerly tangled in this tech, the company possibly recognizes how to magnify that into a completely driverless system.
GTX 1070 will help to make profit
GTX 980 Ti was priced at $650, and it is expected that NVIDIA’s GTX 1070 will have approximately the same performance as that of GTX 980 Ti. The company will definitely profit from the GTX 1070 as bringing this level of performance down to a $379 price point will encourage the majority of gamers to upgrade, specifically to those who desired GTX 980 Ti-class performance but were not able to pay for it.
On the other hand, the GTX 1070 comes with 8 GB of memory. The company’s previous-generation GTX 970 and 980 cards came with only four GB of memory. Moreover, NVIDIA’s flagship 980 Ti was also crammed with only 6 GB of memory.
However, the extra memory perhaps would not make much of a change in most real-world gaming circumstances currently, but it is an exciting marketing point that should be appealing mainly to less tech-savvy purchasers.
Conclusion
NVIDIA’s growth will likely stay strong as the company’s management has done an exceptional job of branching out its revenue stream. Due to the diversity, NVIDIA is worth the premium.
Start a free seven-day trial of Premium Membership to GuruFocus.
