Nvidia (NASDAQ:NVDA) just took the wraps off its hotly anticipated new video cards for PC gamers. Demand for the company’s GPUs for crypto mining rigs may have evaporated, but based on what the new Nvidia GeForce RTX 2000 series is capable of, video game fans are going to be lining up to snap up every card Nvidia can make.
NVDA stock got a boost from the reveal, as investors recognized that Nvidia’s new Turing architecture is a game changer that could drive a lucrative round of upgrades.
Nvidia GeForce RTX 2000 Series
Last week, Nvidia announced new GPUs aimed at the professional digital content production market. They featured an all-new Turing architecture that brings real-time ray tracing, AI integration and huge overall performance gains.
The big question after that announcement was how much of that power would make it into the company’s consumer video cards — the ones that are used by PC gamers. After all, this is the market segment that generates over half of NVDA revenue, to the tune of $1.8 billion last quarter.
We now know the answer to that question after the Nvidia GeForce RTX 2000 series of video cards was announced.
The GeForce RTX 2000 GPUs employ Nvidia’s new Turing architecture. That means real-time ray tracing and AI integration. Nvidia says that the overall gain compared to its previous generation Pascal GPUs is up to six times the performance. In an era where computer processor performance gains of 40% is considered a win, offering a video card that is up to six times faster than its predecessors is a big deal. Big enough to make owners of those previous generation cards sit up and take notice.
But what’s revolutionary about the Nvidia GeForce RTX 2000 series isn’t just the raw power these cards deliver, its their support for real-time ray tracing. This technology lets game designers model light as it interacts with objects in the environment. Ray tracing has previously been limited to Hollywood movie productions — and even then it took expensive workstations and extended rendering sessions. Nvidia’s Turing architecture delivers the ultra-realistic lighting effects of ray tracing in real time, and brings them to PC video games. Video cards even from last year won’t be able to take advantage of this advance, just the Nvidia GeForce RTX 2000 series.
This is a game changer. And it has the potential to move a lot of new video cards in Nvidia’s most important market, which is good news for NVDA stock.
Prices for the new video cards range from $599 for the GeForce RTX 2070 to $1,199 for the Nvidia GeForce RTX 2080 Ti Founders Edition.
Game Developer Support
As cool as ray tracing is, the capability to support the technology doesn’t do much good if the support isn’t there in the games themselves.
NVDA says that 21 games will be offering ray tracing support around the time its new video cards are released, including Electronic Arts’ (NASDAQ:EA) Battlefield V — a title which is being used as a showcase for what the new Nvidia GeForce RTX 2000 series is capable of. In addition, Epic Games says it will be integrating real-time ray tracing in its popular Unreal gaming engine later this year.
Lots of Upside for NVDA Stock
NVDA stock took a bit of a tumble after its Q2 earnings revealed demand for its video cards from crypto currency miners had fallen off a cliff. However, the new Nvidia GeForce RTX 2000 video cards are set to jumpstart upgrade demand from PC gamers. The first chip ships on September 20, so the new cards will be hitting store shelves just in time for the holidays. Crypto miners may be laying low for now, but expect PC gamers to line up for the new Turing-based cards, especially after seeing the trailers for games like Battlefield V.
The next big question? What will Nvidia’s video card rival Advanced Micro Devices (NASDAQ:AMD) come back with in response to the GeForce RTX 2000 series and real-time ray tracing?
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.