Will Ray Tracing Bring Fresh Growth to NVIDIA’s ProV Business?



NVIDIA’s Professional Visualization segment

So far, we’ve learned that NVIDIA’s (NVDA) strong growth in the gaming and data center spaces has been slowing, while its automotive business is picking up speed.

One segment that has been growing slowly is the company’s ProV (Professional Visualization) segment, which has risen at an average annual rate of 6% over the last three years. The segment could pick up the pace in fiscal 2019 as the company introduces real-time ray tracing technology.

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ProV revenue

As we can see in the graph above, the fiscal second and fourth quarters are seasonally strong ones for ProV, with the second quarter being the strongest, delivering double-digit sequential growth. For the fiscal second quarter of 2019, we expect the segment’s revenue to rise 15% sequentially to $289 million.

This quarter is an important one for ProV, as it will include the sales of NVIDIA’s RTX ray tracing technology, which the company launched together with Microsoft’s (MSFT) ray tracing API (application programming interface) for DirectX at the end of March.

Ray tracing

NVIDIA’s real-time ray tracing technology renders the path of light on objects and automatically gives the effects of shadows, reflections, and lighting in games and films, making them look more realistic.

At Bank of America Merrill Lynch’s Global Technology Conference, NVIDIA’s CFO, Colette Kress, stated that the company was seeing excitement about ray tracing from developers. The company’s upcoming earnings should be reflective of the adoption of this new technology.

Next, we’ll look at NVIDIA’s profitability.


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