NVIDIA surpasses $1,000! strong!
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business model
NVIDIA's business model revolves around the development and manufacture of high-performance graphics processing units (GPUs). This enables realistic graphics, an immersive gaming experience, and advanced simulations. Furthermore, NVIDIA also provides software frameworks (such as CUDA and TensorRT) to maximize GPU performance, making it possible to apply them in the fields of AI and deep learning.
Key revenue streams
1. Gaming: NVIDIA GPUs are widely used in the gaming market, and the GeForce series is particularly famous. Partnerships with game developers are also strong, contributing to an improved gaming experience.
2. Professional visualization: used in architecture, engineering, and entertainment for applications such as 3D design, virtual reality, and video editing.
3. Data center: NVIDIA GPUs are in high demand for data processing and AI workloads. It is also widely used in cloud computing environments, and is particularly suitable for AI training and inference.
strengths
1. Technical leadership: NVIDIA has established leadership in GPU and AI technology, and its high-performance GPUs are the perfect choice for gamers, data scientists, and AI developers.
2. Strong brand recognition: Known for its high-performance graphics processing, NVIDIA has received high praise among gamers and tech enthusiasts.
3. Vertical integration and platform approach: We develop not only hardware, but also software frameworks and tools, thereby providing a consistent ecosystem for developers and users.
NVIDIA's business model revolves around the development and manufacture of high-performance graphics processing units (GPUs). This enables realistic graphics, an immersive gaming experience, and advanced simulations. Furthermore, NVIDIA also provides software frameworks (such as CUDA and TensorRT) to maximize GPU performance, making it possible to apply them in the fields of AI and deep learning.
Key revenue streams
1. Gaming: NVIDIA GPUs are widely used in the gaming market, and the GeForce series is particularly famous. Partnerships with game developers are also strong, contributing to an improved gaming experience.
2. Professional visualization: used in architecture, engineering, and entertainment for applications such as 3D design, virtual reality, and video editing.
3. Data center: NVIDIA GPUs are in high demand for data processing and AI workloads. It is also widely used in cloud computing environments, and is particularly suitable for AI training and inference.
strengths
1. Technical leadership: NVIDIA has established leadership in GPU and AI technology, and its high-performance GPUs are the perfect choice for gamers, data scientists, and AI developers.
2. Strong brand recognition: Known for its high-performance graphics processing, NVIDIA has received high praise among gamers and tech enthusiasts.
3. Vertical integration and platform approach: We develop not only hardware, but also software frameworks and tools, thereby providing a consistent ecosystem for developers and users.
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vicissitudes
NVIDIA's business model has expanded from the initial gaming market to data centers and autonomous vehicles. This transformation was accelerated by strategic acquisitions and expansion into emerging markets.
superiority
NVIDIA's competitive advantage lies in its highly specialized technology and ecosystem. In particular, the CUDA platform is a platform dedicated to NVIDIA GPUs, and it forms a powerful moat (moat) that is difficult for other manufacturers to follow. Furthermore, long-term technology investments and partnership strategies are key to maintaining competitiveness.
Through these strategies, NVIDIA has established leadership in fields as diverse as gaming, professional visualization, data centers, and autonomous vehicles.
NVIDIA's business model has expanded from the initial gaming market to data centers and autonomous vehicles. This transformation was accelerated by strategic acquisitions and expansion into emerging markets.
superiority
NVIDIA's competitive advantage lies in its highly specialized technology and ecosystem. In particular, the CUDA platform is a platform dedicated to NVIDIA GPUs, and it forms a powerful moat (moat) that is difficult for other manufacturers to follow. Furthermore, long-term technology investments and partnership strategies are key to maintaining competitiveness.
Through these strategies, NVIDIA has established leadership in fields as diverse as gaming, professional visualization, data centers, and autonomous vehicles.
NVIDIA's financial results for this quarter and the latest announcements
Performance Overview
NVIDIA showed an increase in pricing power due to healthy gross margin improvements this quarter. Additionally, earnings and earnings per share (EPS) exceeded expectations due to strong performance in the data center and automotive segments, and exceeded Wall Street estimates.
• NVIDIA FY2025 Q1 (February-April) results
・Earnings per share (adjusted): $6.12 (forecast: $5.65)
・Net sales: 26.04 billion dollars (forecast: 24.69 billion dollars)
・Data center: $22.6 billion (forecast: $21.1 billion)
・Gaming: $2.60 billion (forecast: $2.62 billion)
・Professional visuals: $427 million (estimated: $479 million)
・Automobiles: $329 million (forecast: $292 million)
・Gross Profit Margin (adjusted): 78.9% (forecast: 77.0%)
・FCF (free cash flow): $14.94 billion (forecast: $12.29 billion)
Forecast for NVIDIA FY2025 Q2 (May-July)
・Sales: 28 billion dollars ± 2% (forecast: 26.8 billion dollars)
・Gross Profit Margin (adjusted): 75-76% (forecast: 75.6%)
Additionally, inventory levels have increased as products are being stockpiled in anticipation of strong demand.
Announcement of the new product “Blackwell (Blackwell)”
In 2024/3, NVIDIA announced the next-generation GPU “Blackwell.”
• Performance and efficiency:
• 25 times lower cost and lower power consumption compared to the previous generation for AI processing tasks.
• Up to 30x performance improvement over previous generation for inference workloads.
• Technical details:
• 208 billion transistors.
• Manufactured using TSMC's custom-made 4 nanometer process.
• Equipped with a 2nd generation transformer engine that speeds up AI model learning and inference.
• Origin of the name:
• Named after David Harold Blackwell.
CEO Jensen Juan comments
Jensen Juan stated:
“The next industrial revolution has begun, and companies and countries are partnering with NVIDIA to transition traditional multi-trillion-dollar data centers to accelerated computing, build AI factories, which are new types of data centers, and produce a new product called artificial intelligence. AI will bring significant productivity gains to almost every industry, helping companies increase cost and energy efficiency, and expand revenue opportunities.”
Stock splits and dividend increases
NVIDIA announced a 10-to-1 stock split to make it easier for employees and investors to own shares.
• Stock split:
• The number of issued common shares increased proportionately.
• An additional 9 shares were granted to record holders as of the end of the market on 2024/6/6.
• Trading after the stock split will begin on 2024/6/10.
• Increased cash dividends:
• We increased our quarterly cash dividend by 150% from $0.04 to $0.10 per share.
• The dividend after the stock split is equivalent to $0.01 per share and is scheduled to be paid on 2024/6/28.
Thus, NVIDIA continues to lead the industry through technological innovation and strategic measures while providing attractive returns to investors.
NVIDIA showed an increase in pricing power due to healthy gross margin improvements this quarter. Additionally, earnings and earnings per share (EPS) exceeded expectations due to strong performance in the data center and automotive segments, and exceeded Wall Street estimates.
• NVIDIA FY2025 Q1 (February-April) results
・Earnings per share (adjusted): $6.12 (forecast: $5.65)
・Net sales: 26.04 billion dollars (forecast: 24.69 billion dollars)
・Data center: $22.6 billion (forecast: $21.1 billion)
・Gaming: $2.60 billion (forecast: $2.62 billion)
・Professional visuals: $427 million (estimated: $479 million)
・Automobiles: $329 million (forecast: $292 million)
・Gross Profit Margin (adjusted): 78.9% (forecast: 77.0%)
・FCF (free cash flow): $14.94 billion (forecast: $12.29 billion)
Forecast for NVIDIA FY2025 Q2 (May-July)
・Sales: 28 billion dollars ± 2% (forecast: 26.8 billion dollars)
・Gross Profit Margin (adjusted): 75-76% (forecast: 75.6%)
Additionally, inventory levels have increased as products are being stockpiled in anticipation of strong demand.
Announcement of the new product “Blackwell (Blackwell)”
In 2024/3, NVIDIA announced the next-generation GPU “Blackwell.”
• Performance and efficiency:
• 25 times lower cost and lower power consumption compared to the previous generation for AI processing tasks.
• Up to 30x performance improvement over previous generation for inference workloads.
• Technical details:
• 208 billion transistors.
• Manufactured using TSMC's custom-made 4 nanometer process.
• Equipped with a 2nd generation transformer engine that speeds up AI model learning and inference.
• Origin of the name:
• Named after David Harold Blackwell.
CEO Jensen Juan comments
Jensen Juan stated:
“The next industrial revolution has begun, and companies and countries are partnering with NVIDIA to transition traditional multi-trillion-dollar data centers to accelerated computing, build AI factories, which are new types of data centers, and produce a new product called artificial intelligence. AI will bring significant productivity gains to almost every industry, helping companies increase cost and energy efficiency, and expand revenue opportunities.”
Stock splits and dividend increases
NVIDIA announced a 10-to-1 stock split to make it easier for employees and investors to own shares.
• Stock split:
• The number of issued common shares increased proportionately.
• An additional 9 shares were granted to record holders as of the end of the market on 2024/6/6.
• Trading after the stock split will begin on 2024/6/10.
• Increased cash dividends:
• We increased our quarterly cash dividend by 150% from $0.04 to $0.10 per share.
• The dividend after the stock split is equivalent to $0.01 per share and is scheduled to be paid on 2024/6/28.
Thus, NVIDIA continues to lead the industry through technological innovation and strategic measures while providing attractive returns to investors.
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