Nvidia’s (NASDAQ: NVDA) inception aimed to revolutionize 3D computer graphics for gaming and multimedia sectors. Initially achieving success with various chips, the corporate made an enormous leap in 1999 with the introduction of the Nvidia GeForce 256, the world’s first graphics processing unit (GPU).
This milestone had culminated in the newest GeForce RTX 40 Series, which might deliver life-like graphics to digital content with the assistance of Deep Learning Super Sampling (DLSS), an incredible innovation by Nvidia. DLSS uses artificial intelligence (AI) to create additional frames in a video game scene and enhance image quality.
Until fiscal 2022 (ended Jan. 30, 2022), gaming was routinely Nvidia’s largest revenue driver. The segment generated $12.5 billion in sales that yr, which accounted for 46% of the corporate’s total revenue. But then, all the pieces modified:
Artificial intelligence is transforming the knowledge center
Data centers was where firms stored precious information, but have since evolved to change into centralized hubs for online operations (otherwise often called cloud computing). Today, data centers are home to powerful chips designed by Nvidia to process AI workloads.
The shift began in 2016 when Nvidia delivered the primary AI supercomputer to OpenAI, which it used to develop the early generative AI models that culminated contained in the famous ChatGPT online chatbot.
Now, Nvidia’s leading H100 data center GPUs sell for as much as $40,000 a pop. With centralized data center operators like Microsoft and Amazon ordering a complete lot of 1000’s of them to present cloud customers the computing power they should develop AI.
It sent Nvidia’s data center revenue soaring 279% yr over yr contained in the fiscal 2024 third quarter (ended Oct. 29, 2023). The information center segment now accounts for 80% of Nvidia’s total revenue, leaving the gaming segment contained in the dust.
Nvidia is now a $1.8 trillion behemoth, and $1 trillion of that value was created contained in the last 12 months alone. The excellent news is that Nvidia stock could probably still go higher from here.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Amazon, Microsoft, and Nvidia. The Motley Idiot has a disclosure policy.
Gaming Was Nvidia’s Largest Business. Now, 80% of Its Revenue Comes From Somewhere Else Entirely was originally published by The Motley Idiot