83% Growth for NVIDIA’s Data Center Segment

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Nvidia Corporation’s ($NASDAQ:NVDA) data center segment has overtaken its Gaming segment to become its largest segment, in its Q1 FY2023, growing robustly by 83% YoY. Based on the company’s breakdown of its data center business across 6 data center classes, we examined its product offering that caters to these customers and determined the outlook of its data center business segment as a whole. This growth is being driven by the increasing demand for data and the need to store and process this data. Nvidia is well positioned to benefit from this growth with its GPUs and software offerings. Nvidia’s GPUs are well suited for data center applications due to their high performance and energy efficiency. The company has a wide range of GPUs that cater to different data center needs. Its Tesla GPUs are designed for high-performance computing, while its Quadro GPUs are designed for professional graphics. Nvidia’s software offerings include its CUDA platform, which enables developers to leverage the company’s GPUs for parallel computing.

The company’s recent acquisition of Mellanox will also give it a strong foothold in the data center networking market. In addition to its hardware offerings, Nvidia is also integrating AI into its data center products. Its DGX systems are designed for deep learning and provide customers with the ability to train and deploy AI models. The company is also working on developing new software tools that will make it easier for developers to work with AI. As it recently introduced its Arm CPU products for data centers, we analyzed the Arm CPU market and the players within, and projected its share vs x86 processors. The data center market is evolving and Nvidia is well positioned to capitalize on this trend with its strong product offerings. In the long term, we believe that Nvidia will continue to grow its data center business and generate significant revenue and earnings growth.

Market Reaction

On Thursday, the stock opened at $154.6 and closed at $158.6, up by 4.8% from the prior closing price of 151.3.

VI Analysis

NVIDIA Corp.oration (NVDA) is a company that designs and manufactures computer graphics processors and related software. The company’s products are used in a variety of markets, including gaming, professional visualization, data center, and automotive. The company’s fundamentals reflect its long-term potential. The intrinsic value of NVIDIA shares is around $213.9, calculated by the VI app. This means that the stock is currently undervalued by 26%.

Summary

The positive news and stock price following day show that the company is doing well and is growing.