Last week, I made the point that Nvidia Corporation (NASDAQ:NVDA) isn’t nearly as reliant on the cryptocurrency-mining market as the mania would have you believe. Therefore, dumping your Nvidia stock in response to the advent of Bitmain’s crypto-mining chips — which are cheaper than Nvidia’s hardware — isn’t necessary.
What I didn’t say at the time was what, if not Bitcoin and its peers, are the keys to Nvidia’s future. Now I’ll round out the discussion and lay out three developments outside of the cryptocurrency sphere that any current or prospective owners of NVDA stock will want to bear in mind for the foreseeable future.
What To Watch With Nvidia Stock
The short version of a long story: The graphics processing cards that make your desktop’s display look so great (particularly for gaming) are also well suited to “mine” for cryptocurrencies as well as do the major number-crunching needed in artificial intelligence applications. Though they can’t do a lot of complicated mathwork, they can manage a massive amount of data at any given time.
It’s the latter nuance that will carry Nvidia into the future, and drive Nvidia stock higher.
But what about specifics, if digital currencies aren’t instrumental to Nvidia’s future? Nvidia laid out several hyperspecific technologies at last week’s GTC 2018, the annual graphics processing unit (GPU) Technology Conference that lets outfits like Nvidia and rival Advanced Micro Devices, Inc. (NASDAQ:AMD) really strut their stuff. Three of them stood out among the rest, and will likely shape the future — or at least the future rhetoric — for Nvidia.
No. 1: Drive Pegasus
You can’t find the autonomous car “brain” called Drive Pegasus just yet, but it’s coming. Once it’s here, it will be handling 320 trillion operations per second, aggregating a massive degree of light detection and ranging (LIDAR) and camera input and turning that information into data that can navigate a vehicle all by itself.
More important, Drive Pegasus may well be the end-all, be-all solution in a crowded but so-far-uninspiring field of self-driving vehicle technology developers. Everyone from Intel Corporation (NASDAQ:INTC) to Apple Inc. (NASDAQ:AAPL) is stabbing at.
At stake is a piece — one of the biggest pieces — of the driverless car market expected to be worth $127 billion a decade from now.
No. 2: Tesla V100
For most consumers — and most investors, for that matter — the term “Tesla V100” won’t mean much. For a handful of people who know what the Tesla V100 is though, there’s no denying it’s a head-turner.
No, it’s not a new vehicle design from electric carmaker Tesla Inc (NASDAQ:TSLA). The V100 is a GPU that doubles the amount of HBM2 memory its predecessor used, from 16 GB to 32 GB. By doubling its memory capacity, latency is reduced.
Don’t plan on putting one in your desktop, although you theoretically could if you wanted to. The new V100s are built from the ground up to improve the so-called “deep learning” needed to make artificial intelligence (AI) a reality. The buzz is that companies like International Business Machines Corp (NYSE:IBM) and Hewlett Packard Enterprise Co (NYSE:HPE) are already planning on utilizing the V100 in their data centers.
No. 3: DGX-2
Last but not least, put the DGX-2 on your radar.
The DGX-2 is, in simplest terms, a supercomputer built from the ground up to handle AI development. The off-the-shelf artificial intelligence platform actually uses the aforementioned Tesla V100 — 16 of them in all — as the basis for a workhorse that could only be acquired through a custom-built solution until now. If AI really is the future and becomes the $190 billion market it’s supposed to be by 2025, the DGX-2 is apt to be a big piece of the reason the industry gets there from here.
Bottom Line for Nvidia Stock
It’s interesting, and telling, that Nvidia’s people attending GTC 2018 didn’t even bring up the matter of cryptocurrency mining, except perhaps to answer a question about it. Not even the company sees digital currencies as a meaningful path to greater profits.
Instead, the company made a point of highlighting its most important developments, the top three of which I just discussed. If the company thinks they’re important, current and prospective Nvidia stockholders would be wise to take the hint and keep tabs not just on those products, but also on the industries they address.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.
