NVIDIA’s (NVDA, Financial) diversification is one of the most impressive things about the company. NVIDIA is gaining traction in several high growth segments while maintaining its position as the market-leader in the GPU market. This is probably the only reason why NVIDIA is up over 100% from its 52-week low levels.
A few days ago, NVIDIA revealed information about its new processor known as “Parker." Parker is made up of an identical ARM CPU design to the K1 Denver, namely Denver 2.0. Denver 2.0 is an enhanced version of Denver, which endures the dual core approach of Denver. Most significantly, each core is a 64 bit superscalar processor capable of accomplishing seven concurrent micro-operations.
Parker could easily turn out to be the most powerful ARM processor available currently in the market. However, it will face tough competition from Samsung’s (SSNLF, Financial) Exynos 8890 and Qualcomm’s (QCOM, Financial) Snapdragon 820. Positively, it possesses the most powerful graphics capability present in an ARM chip. The company mainly designed Parker to maintain its lead in the gradually rising automotive business.
Why Virtual Reality Matters?
NVIDIA holds a leading position in the graphics cards industry, followed by AMD (AMD, Financial). The company has delivered amazing graphics cards in the past (before the launch of Pascal architecture).
However, the company recently launched some new Pascal based graphics cards that also support virtual reality. The company is aggressively focusing on the virtual reality space, as it one of the most trending segments at present, which has enough potential to boost the company’s growth in the long run.
Recently, the company launched some new graphics cards specifically for notebooks, after the launch of a PC version of similar graphics cards, and it clearly shows its efforts of not giving up its leading position.
NVIDIA took a massive step into Virtual Reality this month when it introduced its new GTX 1080, 1070 and 1060 graphics cards for notebooks, as the company has upgraded these cards as they come within 10% of the performance of comparable PC graphics cards. As a result, the laptop equipped with any of these graphics cards can be used for VR purposes.
All in all, with NVIDIA’s dominance in notebook as well as desktop GPUs and its new VR-supported graphics cards, the company will endure leading the hardware gaming industry as it moves in the direction of virtual reality.
Conclusion
I have primarily been bullish on NVIDIA due to its diversification, and it continues to be the reason why I expect the stock to head higher. The company’s growing presence in the VR space alone can be its primary long-term growth driver going forward.
Disclosure: I don't hold a position in any of the stocks mentioned in the article.
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