NVDA delivered strong returns over the past half decade mainly attributable to Bitcoin and other cryptos. Growth in gaming also contributed and remains strong growth driver.
GPUs and image processing remains key growth sector in tech due to AI and NLP development. Past share price growth is justified and we see robust growth potential ahead.
Nvidia (NVDA) has been popular with PC gaming enthusiasts over the past years, with me myself acknowledging the merits of dedicated graphics cards NVDA had produced for PCs and laptops.Th However, NVDA has successfully expanded its original business from producing personal computing graphics cards (GeForce GPU series) towards different personal and commercial markets, namely in autonomous cars, artificial intelligence (NYSE:AI) and cloud computing. Looking at the business model of NVDA, personal computing remains as the largest revenue segment for NVDA, contributing 59.21% as of Q3 FY2018.
GeForce remains as the top choice for gamers and high-end personal computing users, with about 70% market share in the discrete GPU market, well ahead of rival AMD (AMD). The growth in this segment over the past years can be mainly attributed to the rise of the gaming industry, with higher demands of graphics and image processing, as well as the appearance of cryptocurrencies, which rely on the extra computing memory and speed generated by graphics cards.
This segment will still see robust growth as demands for personal computing power remains strong, while the PC gaming industry is still experiencing high growth, with the total value of the industry expected to reach about $34 billion in 2019, up from $25 billion in 2015 (Source: Capcom, International Development Group). Obviously the volatility of cryptocurrencies as well as the speculative bubble of the market might pose as a major downside to the personal GPU market and for NVDA, but as NVDA becomes more diversified in their business portfolio, this downside risk will also become more detached from NVDA’s share price performance. Read more from seekingalpha.com…
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