With a current market value of $257.79 billion, Nvidia is now the world’s third-largest chipmaker by capitalization. The firm displaced Intel to rank behind Taiwanese Semiconductor Manufacturing Company and Samsung on the global semiconductor brand list. The corporation’s ascendancy is due to its robust sales to data centers and newly homebound workers in the aftermath of the coronavirus outbreak.
Given its future product release plans and business partnerships, Nvidia should have no problem keeping the faith of its investors.
Nvidia’s Massive Growth
Founded in 1993, Nvidia gradually outpaced its rivals to become the planet’s leading producer of graphics cards. Initially, the company built its reputation on GPUs that could render computer game firms’ most vibrant imagery. However, as the technology industry has changed, the Santa Clara, California-based corporation has evolved its catalog to keep pace.
The manufacturer convinced large-scale web services providers like Facebook and Google that its chips can manage high-performance computing (HPC) and artificial intelligence (AI) operations more effectively than standard processors. As a result, the company has grown its yearly data center revenue from $300 million to $3 billion in five years.
The coronavirus pandemic created an unprecedented demand for the firm’s HPC and AI GPUs as web services usage skyrocketed. In the first quarter of 2020, the corporation generated $1.14 billion in data center component sales, a new company record. The chipmaker’s soaring product sales pushed its net income up 132 percent year-over-year.
While market capitalization can shift with the tides, Nvidia’s forthcoming offerings suggest it will continue to have Wall Street’s support.
Expansion Likely to Continue Beyond 2020
Although it trails market leader Intel by around $17 billion, Nvidia is keen to expand its data center market share.
In May, the chipmaker debuted its Ampere graphics card architecture and A100 GPU, which is designed specifically for use in HPC environments. It is also capable of performing 19.5 TFLOPS, offers 1555 GBps of memory bandwidth, and can handle multi-instance applications. Compared to its predecessor, the A100 provides 6-times higher perform at AI training tasks.
Nvidia is also poised to expand its position in several other markets.
In April, CEO Jensen Huang sent out a companywide email explaining the corporation’s products are helping retail, medical, and logistics firms facilitate their digital transformations. The chipmaker also announced a partnership with Mercedes-Benz to provide components for its next-generation fleet. As part of the deal, 2024 model Mercedes vehicles will feature a driver assistance platform with autonomous capability.
Although Nvidia has been a successful business for more than two decades, 2020 is looking like a watershed year for the chipmaker. The firm’s capability to cultivate cross-industry digitization will likely earn it a place alongside the world’s tech giants before long.