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From: Paul H. Christiansen11/11/2017 10:24:46 AM
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Nvidia Weighs in on Timing for Seismic Tech Shifts



Nvidia Corporation beat earnings today, posting revenues of $2.64B ($2.36B est.), up 32% y/y. Nvidia also posted $1.33 EPS ($0.94 est.) an increase of 60% y/y. In addition, Nvidia is raising its quarterly cash dividend 7 percent to $0.15 per share.

What we learned about the size and timing of seismic shifts in tech. Today, Nvidia’s bread and butter business is around data centers and gaming, but the company will evolve to become the hardware foundation beneath AI, autonomy, and cryptocurrencies.

Size. To put the significance of this shift into perspective, CEO Jensen Huang shared on the call:

“I happen to believe that everything that moves will be autonomous some day.” – Jensen Huang

As evidence of everything moving to autonomy, the company reported DHL is using its Drive PX chips for autonomous light trucks. Separately, the company outlined why the in-car infotainment is going to become an important market in the future. As drivers become passengers, their actions inside a car will change, increasing the need for living-room quality mobile entertainment.

Timing. Separately on the call, Nvidia offered their perspective regarding the timing of these upcoming seismic tech shifts.

Expect robotaxis in late 2019 or early 2020. Consumer level 5 fully-autonomous vehicles on the road by late 2020 or 2021. Largely absent from the earnings call was talk about the VR opportunity, suggesting Nvidia sees ESports gaming as a bigger opportunity in the near-term. This observation does not dampen Loup Ventures’ optimism around VR’s long-term potential.

CPUs passé, GPUs the future. As a starting point, Nvidia is a GPU company. Over the years, Moore’s Law related to CPUs has been the measurement of computing capacity. Jensen mentioned the well-documented breakdown in Moore’s Law multiple times on tonight’s call given his belief its coming to an end as CPU performance improvements plateau. Nvidia’s belief is that GPU improvement will replace CPU improvement as the measurement of computing capacity, giving the company an open-ended growth opportunity in the years to come.

The plot soon to thicken as Intel tries to catch up in GPUs. Intel has been a laggard in the past year with INTC shares are up 37%, compared to NVDA shares up 203%, illustrating investors’ optimism around Nvidia’s 5-year opportunity. However, Intel isn’t letting Nvidia run away with the GPU market, and this week, hired AMD’s GPUs head Raja Koduri to help establish Intel as a player in the GPU space.

http://loupventures.com/nvidia-weighs-in-on-timing-for-seismic-tech-shifts/

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