Why NVIDIA Is Immune to the PC Market SlowdownNVDA) has been one of my favorite stocks over the last few months. The stock is up almost 40% since hitting the February-lows, and I believe it can continue moving higher. The company’ ability to diversify its revenue stream has been extremely impressive, which is why I think it is still a good investment despite its rich valuation.
Why DOOM matters
NVIDIA holds a leading position in the GPU market and generates major portion of its revenue from the sales of graphics cards that powers the personal computers.
This clearly means that there is a significant enticement for PC gamers who are willing to upgrade their graphics cards at comparatively faster rate, something that is absent in the case of non-gamers who holds PCs to perform basic operations such as Internet browsing, light applications, and word processing. According to NVIDIA, high-end graphics games are the driving factor behind rising graphic card sales.
New-generation games require high end graphic cards, which is why NVIDIA is immune to the slowdown in PC market. Talking about new-gen games, there is one upcoming game, titled DOOM, which is expected to hit the market on May 13. DOOM reportedly has the potential to drive the sales of graphics cards by forcing gamers to upgrade their systems with the suitable graphics card.
DOOM 3 is the most recent instalment of the DOOM series and has been a profitable success, selling approximately 3.5 million copies, per former id Software. DOOM 2 was different compared to its previous instalments, and was loved by many gamers.
According to the id’s recently released minimum configuration required for the PC version game, it is highly likely that the game will force many gamers to upgrade their Graphics cards to at least $330 GeForce GTX 970.
The only thing that force gamers to upgrade their graphics card it the inability of their systems to efficiently run high-end games or even does not run at all, on their prevailing hardware. There are many games that need high-end graphics cards to run; therefore it is highly likely that gamers who want to play DOOM’s upcoming series have formerly upgraded their graphics cards.
Bearing in mind the high requirements of the game, NVIDIA could profit from the upgrade action ahead of the game’s release as well as throughout the preliminary availability of the game.
NVIDIA has thrived on the gaming market and I don’t see any reason why this trend will change anytime soon. The arrival of new games that require high-end graphic cards will boost the sales of the entire segment and given that NVIDIA holds the majority of the market share, it stands to benefit from it.
Published on Apr 5, 2016By Akshansh Gandhi