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NVIDIA (NVDA) Takes GPUs a Notch Ahead with Titan RTX

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NVIDIA Corporation (NVDA - Free Report) is on a roll with its Turing micro architecture-based GPUs.

The company recently launched its new GPU, Titan RTX, based on the fully enabled version of the TU102 chip, which will be available at $2,499 in the United States and Europe toward the end of the month.

In the third quarter of the year, the company had come up with its first gaming GPU — GeForce RTX series — based on the TU102 chip. However, some hardware of the chip was disabled back then.

The “T-Rex,” as nicknamed by the company, has been designed specifically for artificial intelligence researchers, data science specialists and content creators.

A glimpse into the core of the graphics card shows the powerful 24GB high-speed GDDR6 RAM, with ray tracing performance upto 11 Gigarays per second compared with 10 Gigarays per second in the GeForce RTX.

AI-Driven GPUs Drive Growth

The strong lineup of advanced graphics cards has made NVIDIA a favorite graphics card provider among PC makers. The company has always generated substantial revenues from its cards because of the significantly higher functionality.

In its last reported quarter, revenues at the GPU business grew 25% year over year to $2.77 billion on the back of strong Datacenter, Professional Visualization and Automotive segments.

Moreover, growth in the company’s AI business, backed by the Turing T4 Cloud GPU launch during the last reported quarter, was a feather in the cap.

Notably, NVIDIA’s other Turing-architecture based GPUs — the Quadro RTX 8000, 6000 and 5000 — have received a positive response from a wide range of customers, including the major movie studios and game developers.

Furthermore, the NVIDIA RTX Server, an integral part of the architecture of the Titan RTX GPU, designed for photo-real rendering in the datacenter opens a new market for GPUs. Notably, it has been adopted by key developers like Adobe (ADBE - Free Report) , ANSYS (ANSS - Free Report) , Autodesk (ADSK - Free Report) and Dassault, among others.

Management is optimistic about expanding its addressable market with Turing and the recently unveiled software offerings. Growth opportunities in ray-traced gaming, rendering, high-performance computing, AI and self-driving cars are expected to be the company’s consistent tailwinds.

We note that weakness in the Gaming segment, due to an excess inventory of midrange Pascal products, is an overhang on the company. However, sustained efforts of this Zacks Rank #4 (Sell) stock toward attaining a robust position in several emerging industries raise hopes of revival.

You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.

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