Nvidia’s market value has grown bigger than data center rival Intel, for the first time...
Nvidia’s market value has grown bigger than chip giant Intel’s for the first time, reaching $251 billion. Nvidia shares have grown 79% year-to-date, to a high of around $420 at the time of writing, while Intel stock has fallen 2.4% over the same period. Nvidia’s market value makes it the third-largest semiconductor company today, behind TSMC and Samsung.
Nvidia reached this milestone following excellent Q1 growth (for first quarter ended April 26, 2020), reported last month — first-quarter revenues were $3.08 billion, up 39% from a year earlier but down 1% sequentially.
Consumer demand for gaming hardware and PCs has increased as many parts of the world initiated stay-at-home orders. This is driving demand for home PCs as huge swathes of the workforce work from home, and gaming hardware as consumers are spending more time at home overall.
Nvidia hitting this milestone may also be thanks to optimism about GPU demand ahead of the coming games console iteration this autumn. A number of high-profile games now support Nvidia’s RTX Ray Tracing technology and more than 100 new laptops were released in Q1 that are powered by Nvidia GeForce GPUs.
Nvidia’s other key business is data center compute, where it competes with Intel to displace CPUs with GPUs to accelerate high-performance compute and AI workloads. Nvidia’s data center business made $1.14 billion in revenue in Q1, up a hefty 80% from a year earlier and 18% sequentially.
Nvidia launched its eighth-generation Ampere GPU this quarter, three years after the previous generation, Volta. Ampere is aimed squarely at AI training and inference in the data center, as well as data analytics, scientific computing and cloud graphics. The Ampere A100 chip is the world’s largest 7nm chip and it delivers more than 1 POPS.
Meanwhile, Intel has come under fire from competitors including Nvidia and AMD in key markets. In a big blow, Apple announced a fortnight ago that it would transition its Mac products away from Intel processors to its own Arm-based silicon following years of rumors. Plus, the flip side of a workforce increasingly working from home may also have had negative affects on enterprise compute spending.
The chip giant has been temporarily surpassed in market valuation before — briefly during the dot com bubble in 1999-2000 by TI, and notably in 2012 and 2014 by Qualcomm. Qualcomm saw boosted market value in 2012 due to growth in application processors for smartphones and tablet computers outstripping Intel’s efforts in the PC market, which was at that time, perceived to be “flat, at best”.