NVIDIA Corporation Inc Fundamental Analysis
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NVIDIA Corporation
Last Updated: 10 Sept 2023
NASDAQ: NVDA
GICS Sector: Technology
Sub-Industry: Semiconductors
Table of Contents
You can download a summary of NVIDIA Corporation's fundamental analysis in PDF here.
Management
CEO: Jensen Huang
Tenure: 30.4 years
NVIDIA Corporation's management team has an average tenure of 14.7 years. It is considered experienced.
Source of Revenue
NVIDIA's GPU, initially designed for 3D graphics and gaming, has evolved into a versatile tool powering various computationally intensive fields. With its parallel processing capabilities and deep learning support, it plays a crucial role in AI, data science, robotics, and more.
NVIDIA follows a platform strategy, uniting hardware, software, and services for diverse markets. Their innovations, like the invention of the GPU and CUDA programming model, have transformed modern computing, especially in high-performance computing and AI. Gamers, live streamers, and creators choose NVIDIA GPUs for immersive experiences, while researchers benefit from GPU acceleration in various applications, from molecular dynamics to climate forecasting.
NVIDIA also serves cloud service providers and consumer internet companies, enhancing services for billions of users, and finding applications in autonomous driving, healthcare, and financial services. Additionally, professional designers rely on NVIDIA GPUs and software for visual effects and product design.
The company reports its business results in two segments.
The Compute & Networking segment includes its Data Center accelerated computing platform; networking; automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions; electric vehicle computing platforms; Jetson for robotics and other embedded platforms; NVIDIA AI Enterprise and other software; and cryptocurrency mining processors, or CMP.
The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU, or vGPU, software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse Enterprise software for building and operating metaverse and 3D internet applications.
The company specializes in markets in which its computing platforms can incorporate processors, interconnects, software, algorithms, systems, and services to deliver unique value. Henceforth, NVIDIA platforms address four large markets: Data Center, Gaming, Professional Visualization, and Automotive.
Data Center
NVIDIA's data center platform is tailored for the most demanding computational tasks in hyperscale, cloud, enterprise, public sector, and edge data centers. It comprises efficient GPUs, DPUs, interconnects, and systems, along with CUDA programming and an extensive library of software tools. This platform significantly enhances computing and power efficiency for AI, deep learning, machine learning, and scientific computing compared to CPU-only approaches. It serves organizations across various industries, partnering with leading companies to transform applications and computing platforms. NVIDIA's data center GPUs, including the recent Hopper architecture, are adaptable to diverse needs, from large language models to genomics.
Gaming
NVIDIA's gaming platform caters to the thriving gaming industry, focusing on PC gaming as the primary platform. They utilize their GPUs and advanced software to improve gaming experiences by delivering smoother, higher-quality graphics. NVIDIA RTX, with ray tracing and AI capabilities, enhances realism in games. Their product lineup includes GeForce RTX and GeForce GTX GPUs for gaming PCs, GeForce NOW cloud gaming for low-powered devices, SHIELD for TV streaming, and game console development services. The recent introduction of the GeForce RTX 40 Series GPUs with advanced technologies promises up to 4X performance compared to the previous generation, meeting the demands of avid gamers.
Professional Visualization
NVIDIA serves the Professional Visualization market by collaborating with independent software vendors (ISVs) to optimize their software for NVIDIA GPUs. Their GPU computing platform enhances productivity and capabilities in fields like design, manufacturing, and digital content creation. The NVIDIA RTX platform enables real-time ray tracing for photorealistic rendering, supported by leading 3D design and content creation applications. NVIDIA Omniverse, a virtual world simulation platform, facilitates 3D workflows and applications like virtual car showrooms and surgical training, driven by VR and AR technologies, powered by their GPUs, further expanding their reach in the professional visualization market.
Automotive
NVIDIA's Automotive market encompasses autonomous vehicles (AV), AI cockpit systems, electric vehicle computing, and infotainment platforms. They provide a comprehensive solution under the DRIVE Hyperion brand for AVs, offering both autonomous driving capabilities and co-pilot assistance to enhance safety. NVIDIA collaborates with numerous automotive partners, including automakers, tier-one suppliers, and research institutions, to develop AI systems for self-driving vehicles. Their unified AI computing architecture, featuring GPUs for training and the DRIVE Hyperion platform for in-vehicle perception, planning, and control, is a key component. NVIDIA also offers data center-based simulation solutions for digital cockpit development and continuous over-the-air updates to enhance vehicle features and capabilities.
The company's segment revenue in fiscal year 2023 saw growth in Compute & Networking, driven by hyperscale customers, cloud service agreements, and Automotive, while CMP contributed very little compared to the previous year. Graphics, however, experienced a decline due to reduced channel inventory and disruptions caused by global economic conditions and COVID-19 in China. Additionally, revenue from customers outside the United States accounted for 69% of fiscal year 2023, down from 84% in fiscal year 2022, primarily affected by China and Taiwan in Data Center and Gaming. No single customer represented more than 10% of total revenue in both fiscal years.
NVIDIA Corporation Reportable Segment Revenue FY2023
NVIDIA Corporation Revenue Geographic Breakdown FY2023