NVIDIA’s stocks have been some of the most resilient over the last few years, growing by more than 3x since 2019, beating pretty much every other company in terms of growth, traction, and investor enthusiasm. Some analysts even claim that Jensen’s mean green machine will overtake Apple in the next five years in market cap. Today, NVIDIA’s market valuation is roughly $550 billion, while Apple stands at a mammoth $2.5 trillion.
The reason is straightforward. The booming data center market and its growing reliance on NVIDIA’s Tensor Core accelerators (previously known as Telsa). The chipmaker’s gaming and data center revenues are setting records with every fiscal quarter, with the former at $3.06 billion (up 85 percent year-over-year) and the latter reaching $2.37 billion (up 35 percent year-over-year).
The AI revolution is comparable to the sudden boom in smartphones’ popularity in the early 21st century that established Apple, Google, and Facebook as market leaders. The analyst believes that NVIDIA’s leading positions in the fields of AI and neural/convolution networks, adding a whopping $15 trillion to its GDP, thereby cementing its position as one of the largest firms in Silicon Valley.
Just have a look at the most powerful (and efficient) data centers around the world. Nine out of ten are powered by NVIDIA’s A100 which was just released last year. AMD is virtually non-existent here, although that will likely change will the launch of the chiplet based MI200 and MI300 accelerators.
Over the past year, NVIDIA’s data center revenue has consistently leveled or exceeded gaming, while in the most recent quarter, the two segments are inching closer with gaming revenue at $3.06 billion, up 85 percent year-over-year, and data center revenue at $2.37 billion, up 35 percent year-over-year.
The company is guiding a third-quarter fiscal revenue of $6.8 billion with adjusted margins of 67%. We’re looking at a growth of 44%, with the data center segment being the primary driver.