Artificial intelligence was invariably the focus of attention in NVIDIA Corp (NASDAQ:NVDA, ETR:NVD)’s latest stunner of a revenue and earnings beat, but the buzz around the fabless chipmaker’s bleeding-edge AI chips clouds the fact Nvidia, historically speaking, was a gaming company.
Indeed, Nvidia’s 10-K was a wildly different beast a handful of years ago.
A quick Ctrl+F comparison shows that Nvidia’s fiscal year 2020 annual report mentioned ‘data center’ (where AI chip revenues are logged) 20 times. In yesterday’s annual report? 66 times.
‘Data center’ as a line item took a lowly third spot in the fiscal year 2020. Today it takes gold.
To be more scientific about it, data center revenues in 2020 totalled $2.98 billion, or a little over a quarter of firm-wide sales.
Gaming revenues by way of sales of its GeForce GPUs on the other hand, comprised over 50% of total revenues at $5.5 billion.
Nvidia’s revenue DNA in fiscal 2024 was that of a vastly different company.
Data center revenues in 2024 totalled $47.5 billion - nearly 80% of firm-wide revenues.
Meanwhile, gaming brought in $10.4 billion, or a mere 17% of total revenues.
If you feel like being adventurous, a breakdown of Nvidia’s 2015 10-K put gaming revenues at over 80%.
Though it paints a picture of a corporation chasing big bucks in an AI sector evolving at a breakneck speed, Nvidia still remains a powerhouse in gaming.
After all, that segment of the business has nearly doubled in four years and 15% in the last year alone (though that followed a 27% dip on a tough Covid-era comparative, when demand for gaming GPUs took off like a rocket).
Despite Nvidia’s AI pivot, it still lacks stable competition in the gaming sector.
Its closest competitor, Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD), clawed back some of its market share in 2023, but Nvidia still commands an 80% share of the discrete GPU market against AMD’s 17% and Intel’s minuscule 2%, as of August 2023.
Yes, Nvidia is as much a gaming company as it ever was, even if AI has dwarfed the segment that put it on the map.