Nvidia has witnessed an extraordinary 769% surge in annual profits, causing its shares to climb more than 16% in a single day. The company's meteoric rise is truly remarkable. At the beginning of 2023, Nvidia was valued at $350 billion. Today, it stands at almost $2 trillion, surpassing Amazon and trailing only Microsoft and Apple as the third most valuable publicly traded entity. This remarkable success has also propelled Nvidia's CEO, Jensen Huang, to the upper echelons of the world's wealthiest individuals.
Although Nvidia is predominantly known for producing top-tier graphics cards for gamers, its recent growth has been predominantly fueled by advancements in AI technology. While AI has been a prominent buzzword in the tech industry for some time, Nvidia's significant strides in this field have brought the company into the spotlight.
The data center segment of Nvidia's operations, which is central to its AI initiatives, has experienced a remarkable 409% revenue increase compared to the previous year's fourth quarter. Data centers, now Nvidia's fastest-growing division, have emerged as the primary revenue source for the company, overshadowing the gaming sector by a significant margin.
Nvidia's Revenue Breakdown Across Markets
Of particular interest to gamers is the fact that Nvidia's gaming revenue now represents only 12% of its total earnings. In contrast, gaming contributed over a quarter of the company's total earnings in the preceding year. With gaming's diminishing share of revenue, enthusiasts of PC gaming may express concerns about the future prioritization of the graphics card segment. Nvidia recently unveiled the RTX 4080 Super, possibly marking the final iteration before the anticipated release of the 50-series GPUs.
Although gaming revenue remained flat compared to the previous quarter, it exhibited a 56% increase from the previous year, generating $10.4 billion independently. Nvidia has frequently grappled with meeting demand, resulting in the gradual reduction of prices for the Nvidia GeForce RTX 4090, which had been selling for well over $2,000 for an extended period.
Nvidia has also forged partnerships within the gaming industry, such as with Nintendo. Speculation suggests that Nvidia will power the upcoming successor to the Switch. While Nintendo has not confirmed any specifics regarding its next gaming platform, enthusiasts are optimistic about the potential integration of Nvidia's DLSS technology, renowned for significantly enhancing frame rates for PC gamers.