MarketWatch First Take: Nvidia, after monster 2016, enters spotlight at CES
Nvidia Corp. is set to take the stage in Las Vegas at CES 2017 on Wednesday evening, where it will upstage rival Intel Corp. following a monster year for the graphics-chip maker.
Nvidia NVDA, +2.63% was the best performing stock in the S&P 500 in 2016, with its stock soaring 224%, while rival Intel’s INTC, -0.23% shares eked out an approximate 5.2% gain in 2016. The evening keynote, the first one at CES, has been given by either Intel or Microsoft Corp. in recent years — Intel CEO Brian Krzanich took the stage the past two years.
Nvidia is mostly known for its graphics chips and cards popular with video-gamers, but it has also made successful forays into new arenas with its high-performance graphics processors — most notably used in data centers and automotive systems — with their focus on deep learning and artificial intelligence. In its most recent third-quarter results, revenue for the 23-year-old chip company soared 54% to $2 billion, far above Wall Street’s expectations.
How Nvidia Went From Gaming to GPUs
(3:12)
Nvidia CEO Jen-Hsun Huang talks about how GPU processing revolutionized his business. He speaks at the WSJDLive conference in Laguna Beach, Calif.
The company said in a recent press release that “you can be sure” its CEO and co-founder Jen-Hsun Huang will “break news in some of the areas we’re focused on: artificial intelligence, self-driving cars, virtual reality and gaming.” The company may unveil the next iteration of its current graphics processing unit and/or graphics board, based on its current Pascal architecture, but it could also make some announcements in the arena of automotive news, where its chips are being used as part of auto infotainment systems and in self-driving cars.
In its last earnings call, Nvidia also noted that customers such as Amazon.com’s AMZN, +0.73% Amazon Web Services, Microsoft Corp.’s MSFT, -0.17% Azure and Alibaba’s BABA, +1.95% AliCloud are all using its graphics processing units for artificial intelligence, data analytics and high-performance computing in their data centers. “They are all using GPUs to do deep learning,” said Patrick Moorhead, principal analyst of Moor Insights & Strategy.
Moorhead said he expects a bit of a victory lap from Huang and a reiteration of Nvidia’s place in the current tech world, where it is involved in all the fields that have the biggest buzz.
“This is an indication of how hot Nvidia is right now,” Moorhead said. “They are at the epicenter of all of the cool things, almost every buzz word you can think of, self-driving cars, AI, drones are likely done with deep neural network training, games … They are this center point of some really cool stuff.”
While Moorhead is not worried about Intel’s position, the Silicon Valley chip giant has been making both defensive and offensive moves for the future. Last August it bought Nervana Systems, a startup focused on deep learning, to bolster its focus on artificial intelligence and machine learning, and Intel is clearly gearing up for a battle for the hearts of self-driving cars. Just Tuesday, it bought a 15% stake in Here International B.V., to jointly develop navigation technology for self-driving cars, among its other efforts, such as its pact with BMW AG and Mobileye NV.
Intel is hosting its own press conference at CES late Wednesday afternoon, where it says CEO Krzanich will “immerse you in virtual reality to experience how Intel technology is extending far beyond consumer electronics to define almost every aspect of our lives and transform industries.”
Investors will likely be focused on Huang’s keynote for signs of whether Nvidia can continue its huge momentum going into 2017.