What happened
NVIDIAin (NASDAQ: NVDA) the share price rose 121.9% last year, according to data provided by S&P Global Market Intelligence. The graphics specialist launched new graphics processing units (GPUs) in its two largest segments – data center and games – that generated high demand.
In September, NVIDIA made waves in the chip industry by announcing the $ 40 billion acquisition of ARM Holdings, controlled by SoftBank Group. The deal is yet to pass regulatory scrutiny, but it would significantly increase NVIDIA’s ability to provide cutting-edge artificial intelligence (AI) solutions using ARM chip designs.
Ampere-based NVIDIA A100 GPU. Image source: NVIDIA.
And
Leading cloud companies are rolling out NVIDIA’s new A100 GPUs, which are based on the latest Ampere chip architecture. This generated a record year for NVIDIA’s data center business, with segment revenue growing 80% year-over-year in the first fiscal quarter, 167% in the second and 162% in the third.
In addition to the strong data center results, interest in games exploded in 2020, providing record sales for NVIDIA’s GPU RTX business. The segment reached a quarterly record of $ 2.27 billion in revenue in the third fiscal quarter, an increase of 37% year on year.
What now
A catalyst to be observed in the short term is the impact that the recent rise in cryptocurrency prices can have on the growth of the gaming segment. The RTX 30 series graphics cards were sold, in part due to the high demand from cryptocurrency miners. This means that the gaming industry is likely to have fantastic results when NVIDIA releases its fourth quarter fiscal results.
As for the data center segment, NVIDIA is still in the early stages of accelerating its A100 GPU. It is seeing technology giants and researchers buying more of these new chips for conversational AI and recommendation systems.
Looking at the big picture, the ARM agreement can significantly extend NVIDIA’s leadership in the semiconductor industry. But regardless of when the deal is approved, NVIDIA’s current leadership in graphics processing puts the company in a great position to provide investors with returns, as organizations increasingly rely on GPUs’ advanced computing power to handle loads. AI workflow.