NVIDIA Corporation (NVDA - Free Report) unveiled a new TITAN V graphics processing unit (“GPU”) for the PCs at annual Neural Information Processing Systems conference in Long Beach, CA. The new TITAN V is built on the NVIDIA Volta architecture-based GPUs.
The all new Titan V desktop for PCs is particularly targeted at machine learning and artificial intelligence (“AI”), an area where the company has worked hard in order to establish itself in this space in recent years.
Notably, the stock has been clocking solid returns of 109.9% in the past year, outperforming the industry’s growth of about 46.8%.
What’s the Specialty?
TITAN V is integrated on the new TSMC 12-nanometer FFN high-performance manufacturing process. The 12GB HBM2 video memory card offers enhanced graphics capabilities is likely to enthral gamers.
Per the company, the new TITAN V which is built on 21.1 billion transistors is capable of delivering 110 teraflops of performance, which is more than 9x times more powerful compared with its predecessor, the Titan Xp, which was announced in April, this year. The all new GPU is immediately available priced at $2,999.
With the launch of TITAN V, NVIDIA can maximize user experience by offering high performance computing (“HPC”) capabilities. Further, these GPUs are touted to be more energy efficient than the earlier versions. Consequently, the launch of this product will enable the company to increase customer base and also help in garnering additional revenues.
We also believe that this launch will provide NVIDIAan edge against Advanced Micro Devices, Inc.’s (AMD - Free Report) , new Radeon RX Vega 56 and 64 graphics cards, which were released in August this year. In fact, this launch is a testimony to NVIDIA’s foray into the high-end graphics card market.
PC Gaming and Graphics Card Market
Per Gartner, PC shipments declined 3.6% in the third quarter of 2017. However, growth of the high-end PC market that includes gaming PCs was better than expected.
Per Jon Peddie Research (“JPR”), with an increase in the number of people engaging in PC gaming, the related hardware market is experiencing a huge boost. Per the research firm, the market exceeded $30 billion mark in 2016 and is anticipated to witness compound annual growth rate (CAGR) of 6% through 2019.
Growth in the gaming hardware market is driving demand for graphics processors as well. Per Allied Market Research, the GPU market is anticipated to reach $157.1 billion by 2022 at a CAGR of 35.6% from 2016 to 2022.
Per JPR, in third-quarter 2017, the graphics board shipments increased 29.1% sequentially and 21.5% year over year. NVIDIA continues to be a leader with 72.8% share, while AMD’s market share was 69.7%.
We believe that the launch of the new graphics cards will help NVIDIA maintain its market share going forward.
NVIDIA is the world’s biggest graphic processing hardware provider for PCs. The company’s efforts toward autonomous vehicle and the AI segment shows that it intends to be the largest player in the self-driving and machine learning arena too. Furthermore, the company will be able to reduce dependency on the PC industry by expanding business avenues, which is currently declining.
Given the accelerated momentum in gaming, datacenter and automotive technology, we believe that this Zacks Rank #1 (Strong Buy) stock with a long-term EPS growth estimate of 10.3% will continue to rally. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other top-ranked stocks in the broader technology sector are Intel Corporation (INTC - Free Report) and DXC Technology Company (DXC - Free Report) , sporting a Zacks Rank #1.
Long-term earnings growth rate for Intel and DXC are projected to be 8.42% and 10.5%, respectively.
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