NVIDIA: Go Long for Strong Gains

NVIDIA (NVDA) announced second quarter ended July 31, 2016 total non-GAAP revenue of $1.43 billion, up 9 percent sequentially from $1.31 billion in first quarter of fiscal 2017 and an increase of 24 percent year-over-year from $1.15 billion during the same period last year. Going forward, the company estimates third quarter of fiscal 2017 total revenue to be in the range of $1.65 billion to $1.71 billion.

Strong growth

NVIDIA declared second quarter of fiscal year 2017 non-GAAP net income of $313 million or $0.53 per diluted share, up 19 percent sequentially from $263 million or $0.46 per diluted share in first quarter of fiscal year 2017 and an increase of 65 percent year-over-year from $190 million or $0.34 per diluted share in second quarter of fiscal year 2016.
Moving ahead, the company estimates third quarter of fiscal year 2017 non-GAAP gross margin to be in the range of 57.5 percent to 58.5 percent.

The global computer graphics technology company reported continued sequential and year-over-year growths in both its top and bottom lines primarily driven by the solid demand for the company’s innovative Pascal-generation GPUs coupled with rising interest in extreme learning.

NVIDIA has achieved record year-over-year expansions in revenue, gross margin and operating income that highlights the company’s superior operational excellence targeted on delivering industry-leading growth while offering superior shareholder returns in form of dividends and strategic share repurchases.

NVIDIA has registered outstanding year-over-year growths across all the key market platforms including, the gaming platform, datacenter and auto segments each delivering 30%, 40% and 80% of 3-year CAGR respectively.
NVIDIA: Go Long for Strong Gains
Image by JacekAbramowicz / Pixabay
For the gaming platform, NVIDIA launched the newest four graphic cards based on the Pascal technology platform comprising of NVIDIA® GeForce® GTX 1070 and 1080 that have made records for achieving industry-leading power efficiency and speed. GTX 1060 offers superior virtual reality experience at solid value while TITAN X is expected to be the greatest gaming power delivering beast developed till date for consumers.

The immersive gaming experience being offered by technologically superior graphics cards of NVIDIA is expected to continue to drive sustainable long-term customer traction while encouraging the company to significantly and consistently utilize its industry-leading financial position to develop and deliver solid innovation.

Focusing on platform development  

The strategic and gradual development of a single architecture concept in crafting games that can run on all the gaming platforms including, PC, XBOX ONE, XBOX 360, PS3 and PS4 projects significant growth opportunity for the computer graphics company with significant installed base. In addition, the path traced audio from the introduction of NVIDIA VRWORKS audio is expected to significantly attract several other new customers.

The planned introduction of GeForce GTX 1080 graphic card has redefined the PC gaming power with a strong 16nm architecture, robust GDDR5 superfast memory and a new technological craftsmanship that is much faster and energy efficient than GTX 980 series graphic cards. Further, GTX 1080 is also believed to be faster than 980 SLI and TITAN X.

The innovative Maxwell architecture of PC graphics cards is estimated to bring an entire new technology revolution in PC gaming with significant GPU gaming power achieved at minimal power consumption which is expected to notably popularize the Maxwell architecture of GPU manufacturing and thus, offering breathtaking graphics in mobile devices as well, going forward.


Overall, the investors are advised to “Buy” NVIDIA Corporation considering the company’s significant near-term and longer term growth prospects being supported by a solid financial position with notable total cash of $4.88 billion and weaker total debt position of $1.45 billion only, encouraging the company to make future growth investments while delivering attractive shareholder returns. The profit margin of 16.60% is extremely impressive. Moreover, the PEG ratio of 1.41 signifies industry-leading company growth.
Published on Sep 1, 2016
By Subhen Mittra

Copyrighted 2016. Content published with author's permission.

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