I agree that the market has boosted Nvidia (NVDA) to a notably high valuation when compared to its sector/industry peers. However, the unique position of Nvidia of being the dominant player in the duopoly over GPUs (Graphics Processing Units) gives it an almost-unlimited source of growth momentum. Jon Peddie Research already reported earlier this year that Nvidia still has over 70% of the global market for discrete GPUs.
The entry-level and mid-range Polaris Radeon GPUs from Advanced Micro Devices (AMD) chipped away at Nvidia’s market share last year. However, Nvidia took some share back in Q1 of this year.
(Source: Jon Peddie Research)
There’s still no Q2 2017 report from Jon Peddie. However, I believe Nvidia most likely retained the same 72% or higher share in discrete GPUs. AMD did not really a high-end Radeon GPU during the Q2 period. I also checked Amazon’s best-seller list and Nvidia GPUs still ruled. The discrete GPU business is not solely dictated by OEMs, it is the consumer, enthusiast, the PC builder who also determines which discrete GPUs are going to be top-grossing.
Please continue reading at Nvidia Stock Outlook: Keep The Faith, Nvidia Is Likely To Breach $175 Soon
I am a Senior Analyst at I Know First.
Disclosure: I am/we are long nvda, AMD.