Following the publication of the quarterly report, NVIDIA stocks updated their all-time high at the end of last week. Investors were inspired by server revenue growth rates of 80% per year. For the first time, revenue in this segment exceeded $ 1 billion. At this pace, the NVIDIA gaming business will be able to fade into the background very soon.
In the gaming segment, NVIDIA earned $ 1.34 billion, in the server segment – $ 1.14 billion, but in the latter case, Mellanox revenue was not yet taken into account. Already in the second quarter, the share of NVIDIA revenue in the server segment may approach 50%, since this item will also take into account revenues from the sale of Mellanox products. According to rumors, NVIDIA gaming innovations will not appear before the end of the third quarter, so there is no reason to expect a surge in demand for the gaming direction in the second quarter. The server segment has every chance to come out on top among the company’s revenue sources.
According to Mordor Intelligence forecasts, from 2019 to 2024, the GPU market capacity will increase from $ 21 to more than $ 100 billion. Such a leap will be possible only with the active use of GPUs to speed up calculations in server systems of various ranks. Gartner representatives expect that the server infrastructure market will grow from $ 155 to $ 230 billion from 2019 to 2025. Obviously, a significant part of the revenue will come from the GPU in this segment. At such a growth rate of demand, NVIDIA can easily take one of the leading positions, and revenue from sales of gaming video cards will become secondary to it on a long-term basis.
It is becoming clear and Intel’s desire to return to the discrete graphics market. The actively discussed discrete graphics solution DG1, which will enter the market this year, will gain a foothold in the initial range of the mobile segment. All bets are placed on Ponte Vecchio computing accelerators, which at the end of 2021 will offer a 7-nm process technology, complex layout solutions, and a well-scalable architecture. NVIDIA and AMD will not be the only players in the market of server accelerators based on GPUs. The latter even singled out GPU computing architectures into an independent CDNA family. Competition promises to be serious.
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