Will the Volta GPU Help NVIDIA Conquer the Cloud?
NVIDIA's (NASDAQ: NVDA) data center business has been one of its biggest growth drivers in recent quarters thanks to the growing application of GPUs (graphics processing units) in cloud computing applications. The chipmaker now gets almost 19% of its revenue by selling GPUs for data centers, up from 10% just a year ago as almost all the big cloud players are lining up for its chips to speed up their infrastructure and prepare for the era of artificial intelligence (AI).
In fact, NVIDIA's data center revenue shot up 175% year over year during the second quarter. More importantly, it is capable of maintaining this terrific pace of growth on the back of its recently launched Volta GPUs that are expected to enhance its lead in this space. Let's see why.
Jefferies analyst Mark Lipacis believes that NVIDIA's Volta GPUs, announced in May this year, will accelerate growth and help deliver positive earnings surprises over the next couple of years, based on their ability to power AI applications in the cloud. Lipacis also states that the chipmaker is on track to capture 80% of the profits of the AI chip market, which looks like a strong possibility given the pace at which cloud companies are lapping up its latest offering.
Source: Fool.com
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