Nvidia Poised to Benefit From Cloud Computing Rebound

Now that the outlook for cloud data center growth and gaming is improving, many analysts recently have had a change of heart regarding the future prospects of growth for Nvidia Corp.

cloud Computing

The primary basis for analysts’ renewed expectations is the recent improvement in capital expenditures by cloud computing companies after a year of slack spending on graphics processing unit chips and other microprocessors. In addition to favorable projections for data center and PC applications growth for Nvidia’s powerful GPU chips, some analysts anticipate an improving game market environment, which for years had been the predominant engine of consistent revenue growth for the company.

Nvidia received a shot in the arm from sales of Nintendo’s (TSE:7974) new Switch Lite gaming console, which uses the company’s robust GPU chips. Nintendo sold 1.95 million of the devices in the third quarter, leading to a 26% revenue boost in Nvidia’s gaming unit over sales in its second quarter.

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