NVIDIA’s New GeForce RTX 2080 Gaming GPU Revives Confidence


Nov. 20 2020, Updated 3:46 p.m. ET

NVIDIA stock rises on new gaming GPU announcement

There’s been a lot of volatility around NVIDIA (NVDA) lately. The stock fell 6.8% on August 17 after it reported weaker guidance for the fiscal third quarter of 2019 due to the end of the crypto boom and slowing demand from gamers ahead of the launch of its next-generation gaming GPU (graphics processing unit).

Advanced Micro Devices’ (AMD) graphics earnings were also hit by the end of the crypto boom, but the damage was offset by growth in the PC market.

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However, NVIDIA stock rose 3.2% on August 20 when its CEO, Jensen Huang, revealed the company’s next-generation Turing-based GeForce RTX 20 series gaming GPU at Gamescom in Germany. NVIDIA stock rose 2% when it first announced its Turing GPU architecture on its Quadro platform at SIGGRAPH 2018 on August 13. However, the announcement of the Quadro RTX series didn’t stop investors from becoming negative on the stock on its weaker earnings guidance.

Investors react more positively to GeForce RTX than Quadro RTX

Investors reacted more positively to NVIDIA’s GeForce RTX 20 series, as gaming contributes more than 55% to the company’s revenue. This segment has been growing in the double digits on a YoY (year-over-year) basis for the last two and a half years. Hence, any growth in gaming could significantly impact NVIDIA’s overall earnings.

NVIDIA’s Professional Visualization segment, which sells Quadro GPUs, contributes less than 10% to the company’s revenue, not affecting the company’s overall earnings as strongly as gaming.

NVIDIA rebrands its GPUs to focus on ray tracing

What’s interesting about the Turing GPU is that it’s the world’s first real-time ray tracing GPU. NVIDIA is emphasizing this feature to the extent that it has rebranded its GeForce GPUs from “GTX” to “RTX,” denoting its new RT cores dedicated to ray tracing.

NVIDIA’s blog reported that the company has been working on RTX technology for ten years and that it’s the company’s biggest leap in one generation. Next, we’ll see what NVIDIA’s plans are for this next-generation technology.

Check out all the data we have added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data as well as dividend info. Take a look!


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