In the past 24 years, Nvidia has had a spectacular run and it has outpaced several bigger competitors. The chip making company has even pushed more established rivals like VideoLogic out of the computer business and outperformed graphic cards companies like 3dfx Interactive. Moreover, the chip maker has done a great job of marginalizing ATI, compelling it primary competitor to give its mobile GPU architecture to Qualcomm and be bought by AMD.
Nvidia outperforming several big competitors
The stock of the Chip Company has appreciated well over 6400% since its IPO in 1999. But, most of that appreciation happened in the last year when the shares of the company hiked to today’s price of slightly above $100 from about $37 in 2007.
Now, the company has a Price/Earnings ratio above 40, which points out that the investors have huge expectations for the company. The company, with annual revenues just below $7 billion, would need to identify major new customers willing to pay a large premium for its tech to justify its almost $60 billion valuation.
According to investors, the chip maker will find these customers in AI (Artificial Intelligence), specifically in the automotive industry, and in Machine Learning, neural net processing and other AI tasks by data center clients like IBM and Facebook. However, it is notable that Nvidia failed spectacularly when presented with a good opportunity to radically expand sales beyond its origins in the computer industry even after its mobile efforts being closely aligned with both Google’s Android (Google’s own Pixel C and Nexus 9, and Motorola Xoom and Dell Streak tablets) and Microsoft (Surface RT and in the Zune and Kin).
Apple could take over the GPU market
Of course, currently nothing can be said about Apple – the Cupertino-based iPhone maker – being successful in taking over the GPU market. However, given the large pocket the Silicon Valley giant has, it is possible. Also, the company has been quite successful in making the processors. The A10 Fusion of the tech giant is one of the best chips that is available to both Google and Samsung. The 2015’s A9 chip also outperformed the top chips in new Android flagship smartphones.
Also, we know that the tech giant has good experience in developing advanced and specialized silicon and has the ability to fund the expensive advanced research and development. Now, the iPhone maker is spending around $10 billion yearly on Research and Development. Also, the chip making company spends less than $1.5 billion annually.