[Click eStock] "NVIDIA, Global GPU Market No.1, Leading Stock in the AI Data Center Era"

[Asia Economy Reporter Eunmo Koo] Shinhan Financial Investment highlighted NVIDIA's competitive advantage in graphics processing units (GPUs), artificial intelligence data centers, and autonomous driving as key investment points.

NVIDIA, a fabless company that developed graphics cards in 1999, maintains the number one market share in the external GPU market (over 70% annually). Recently, it has emerged as a leading company in AI computing. Its main products are divided into GPUs and Tegra processors (single chips) used in mobile products. Based on the 2020 fiscal year, the sales proportion by demand sector is gaming 51%, data centers 27%, commercial design 11%, automotive (including autonomous driving) 6%, and others 5%.

On the 10th, Shinhan Financial Investment researcher Hyungtae Kim presented NVIDIA's investment points as GPU competitive advantage, AI data centers, and autonomous driving in a report. First, the greatest strength in the gaming sector is the long-lasting competitive advantage, with game developers utilizing NVIDIA's platform for development. Researcher Kim explained, "This means optimization is carried out from the development stage to release, making it very advantageous in terms of compatibility." He also analyzed, "The 'GeForce Now' service launched last month has already surpassed 1 million subscribers, raising expectations," and "The cloud gaming market is expected to grow at an average annual rate of 59% until 2024, representing an opportunity."

He also mentioned that AI demand, judged to have entered the early market, is rapidly increasing mainly in hyperscale data centers. Researcher Kim predicted, "The proportion of hyperscale in the data center market will exceed 53% in 2021," and "As the AI acceleration platform enters a structural growth phase, GPUs are emerging as the optimal computing devices, and benefits are expected."

Lastly, in the autonomous driving sector, comprehensive cooperation with research institutions, parts suppliers, and automakers continues. Researcher Kim forecasted, "At the time of 5G expansion, it is highly likely to emerge as a major growth driver."

Although concerns about short-term volatility are highlighted, the mid- to long-term momentum is still considered valid. Researcher Kim explained, "The stock price's price-to-earnings ratio (PER) based on the 2021 fiscal year is 34 times, which is below the 2017 PER of 36 times before the abnormal demand from cryptocurrencies was reflected in valuation," and "The average consensus adjustment for tech companies is only -0.2%, so while short-term unease exists, the market's confidence in mid- to long-term momentum is judged to be solid."

This content was produced with the assistance of AI translation services.