Nvidia (NVDA) is one of those tech companies you elevate to the top pantheon of tech companies and readers can’t take a glimpse into the future just by getting to know the chip company better.
Bluntly speaking, it’s a can’t miss tech company that every reader should have as part of their portfolio.
How are they part of the avant-garde of tech?
They are flagbearers of accelerated computing and will contribute part of the groundwork upon which the metaverse and its future business opportunities will be constructed upon.
Sounds sexy, right?
Nvidia deals in chips — chips are enablers, but chips don't create markets, software creates market.
At this point, accelerated computing is very different than general-purpose computing, it’s just at another level with the amount of data these need to be processed and the functionality of it.
Artificial intelligence, robotics, and most of the cutting-edge applications in the world need support from accelerated computing because GPUs run out of steam and that people are saying that not because it's not true, it is abundantly clear that the amount of instruction in parallel that you can squeeze out of a system is although not zero, is incredibly hard.
Accelerated computing delivers great benefits and does not require a lot of work and yet the work basically says for every domain, for every application — to have a whole stack.
What is a stack?
A stack is a linear data structure that follows a particular order in which the operations are performed.
And so whenever you want to open a new market by accelerating those applications or that domain of applications, you have to come up with a new stack, and the new stack is hard because you have to understand the application, you have to understand the algorithms, the mathematics, you have to understand computer science to distribute it across, to take something that was single-threaded and make it multi-threaded and make something that computer specialists have done sequentially and make it process in parallel.
You break everything, you break storage, you break networking, you break everything.
And so it takes a fair amount of expertise and that's why over the course of 30 years Nvidia has become a full-stack company because they solve complex problems consistently practically through decades basically integrating and connecting all that needs to be connected in a fluid type of way.
The ultimate benefit, once you have the ability, then you can open new markets and Nvidia has played a really large role in democratizing artificial intelligence and making it possible for anybody to be able to do it.
Democratized scientific computing is one of Nvidia’s biggest achievements so that researchers and scientists, computer scientists, data scientists, scientists of all kinds can get access to this incredibly powerful tool that we call computers to do advanced research.
This brilliant, advanced computing is thrusting Nvidia to the forefront of the metaverse where they have been working on perfecting the technology to populate a high-quality 3D avatar.
They call this business division the Omniverse and it took half a decade to start building Omniverse, but its largely built on a quarter century of work.
Nvidia is developing an AI to be able to speak in a human way so that people feel more comfortable and more engaged with the AI.
They are being built in pieces and will be integrated to create what is called Omniverse Avatar.
How quickly will they deploy this?
I believe Omniverse Avatar will be in drive-throughs and restaurants, fast food restaurants, check out with restaurants, in retail stores, all over the world within less than five years.
And we're going to need it in all kinds of different applications because there is such a great shortage of labor and there is such a wonderful way that you can now engage with a 3D Avatar.
This 3D avatar doesn't get tired and it's always on and it will certainly be cloud-native.
This revenue and growth essentially are generated by accelerated computing and is a full-stack challenge.
So I am not focusing on the 50% quarterly revenue growth or the 83% in quarterly EPS growth, because that will all fall into place naturally if they keep their lead in accelerated computing refining their full-stack capabilities.
It takes software to open new markets. Chips can't open new markets. If you build another chip, you can steal somebody's share, but you can't open a new market and it takes software to open new markets.
Lastly, the Omniverse opportunity is a great opportunity for Nvidia who could be responsible for creating the avatars in the metaverse.
They are ostensibly one of the foundational companies of the Metaverse.
Nvidia are one of our favorite tech companies at the Mad Hedge Technology Letter.
