While investors’ attention is on Nvidia’s AI chips, the company’s network business has developed into an important growth driver.
• NVIDIA network business is an important but often overlooked part of the data center segment
• In sales in the last financial year, the area exceeded the gaming segment
• Network solutions are crucial so that the AI chips from Nvidia can act as a powerful supercomputer
The underestimated role of the network business
According to a report by Yahoo Finance, written by Daniel Howley, investor attention in the quarterly results of Nvidia focuses on the income from the sale of AI processors in the data center segment. However, the associated network infrastructure, which consists of solutions such as NVLINK, Infiniband and Ethernet, is less noticed.
In the past financial year, Nvidia generated $ 12.9 billion through network solutions, which was included in the data center income of $ 115.1 billion. This amount exceeded the $ 11.3 billion, which recorded the company’s second largest segment, gaming, in the same period. Gene Munster, Managing Partner at Deepwater Asset Management, described the area compared to Yahoo Finance as the “most underestimated part of Nvidia’s business”.
The technology behind the scenes
As Gilad Shainer, Senior Vice President of Networking at Nvidia, explained, the infrastructure that connects the computing units is the most important part in the construction of a supercomputer. The company uses three types of networks: NVLINK connects GPUS within a server, Infiniband links several server nodes in data centers into a single large AI computer, and Ethernet serves as a front-end network for system management.
These networks enable quick and efficient communication between the chips. Without this infrastructure, the performance sought by the buyers of Nvidia chips would not be achieved, as Gene Munster emphasized. This is particularly important for so -called inferencing -executing AI models -which requires increasingly powerful data center systems.
Competition and outlook
The company is also faced with competition in the network segment. The competitors include AMD, cloud providers such as Amazon, Google and Microsoft as well as industry-owned competing network technologies such as Ualink. According to the report, however, Nvidia is currently leading the field. Since the demand for AI continues to increase, the company’s network business is also expected.
What analysts expect from the Nvidia balance
The upcoming record of the AI giant will provide information. Nvidia will disclose the books on August 27th after the US exchange. Experts from Factset require an EPS of $ 1, while in the previous year there were $ 0.67 in the books. In sales, expectations of $ 45.76 billion and the previous year’s figures of $ 30.04 billion are compared.
Editor finance.net
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