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The global leader in visual computing technologies, NVIDIA Corp. (NVDA - Analyst Report) and IBM (IBM - Analyst Report) recently announced a strategic alliance to produce GPU-accelerated editions of IBM's enterprise software running on its Power technology.

The partnership is a positive for NVIDIA as it strengthens the company’s position versus Intel (INTC - Analyst Report) through a strong ally. This will increase NVIDIA’s customer base and help in garnering additional revenues.

IBM’s next generation Power8 Processor features the new 8-Way simultaneous multithreading (SMT) along with 512 KB SRAM L2 cache per core, 96 MB eDRAM shared L3 cache and also 128 MB of eDRAM L4 cache, which is one of the most powerful and accessible arrangement for cloud-based data center servers.

Additionally, the collaboration of IBM POWER 8 CPUs and NVIDIA's Tesla GPU accelerators will help to maximize user experience by offering high performance computing (HPC) capabilities.

Apart from this, NVIDIA also unveiled the NVIDIA Tesla K40 GPU accelerator, the fastest GPU accelerator, primarily aimed at scientific, engineering, HPC and enterprise applications. The launch will help NVIDIA to generate additional demand for its graphics technology.

NVIDIA Corporation offers digital media processors and related software for a wide range of visual computing platforms. It is a worldwide leader in visual computing technologies and the inventor of the graphic processing unit or GPU.

NVIDIA’s innovative product pipeline that consists of the recently introduced SHIELD and the upcoming mobile processor Logan Tegra 4 processors will boost top-line growth, going forward.

However, the company is facing stiff competition from the likes of Advanced Micro Devices, Inc. (AMD - Analyst Report), Intel and QUALCOMM Inc. (QCOM - Analyst Report). Also, higher operating expenses are expected to hurt profitability in the near term.

Currently, NVIDIA has a Zacks Rank #3 (Hold).

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