Nvidia, the leading graphics processing unit (GPU) manufacturer, has been making significant strides in generative AI and gaming GPUs, according to a recent report by Oppenheimer analyst Rick Schafer. These advancements are expected to drive the company's growth in the near term and contribute to its long-term success.



In the near term, Nvidia's gaming GPU sales are expected to be driven by the release of its new Ada Lovelace GPU chips for gaming in Q3 2023. This new generation of GPUs is anticipated to offer significant performance improvements, attracting gamers and driving demand for high-end graphics cards. According to Jon Peddie Research, Nvidia's market share in the discrete GPU market jumped to 88% in Q3 2024, surpassing AMD and Intel, indicating strong demand for Nvidia's gaming GPUs.

In addition to gaming, Nvidia's data center revenues are expected to climb sequentially in Q2 2023 and continue to grow in the following quarters, driven by AI and data center demand. The H100/Hopper GPU is expected to ramp production in Q3 2023, extending Nvidia's AI training/inference lead and driving data center revenues. The data center market is a significant growth opportunity for Nvidia, as AI and machine learning workloads continue to increase.

The Hopper GPU, alongside the Grace CPU superchip, is expected to drive the next wave of AI applications, including Digital Twins, transformers, and large language models. Nvidia's platform of CPU, GPU, DPU, and software enables an accelerated computing ecosystem, sustaining sales and driving long-term growth. The growth of AI applications is expected to be the strongest card in Nvidia's deck for long-term growth, as AI continues to permeate various industries and use cases.



In conclusion, Nvidia's advancements in generative AI and gaming GPUs are expected to drive the company's growth in the near term and contribute to its long-term success. The release of new GPU generations, such as Ada Lovelace and Hopper, along with the growth in AI and data center revenues, positions Nvidia to maintain its market leadership and capitalize on the growing demand for AI and accelerated computing technologies. As Nvidia continues to innovate and adapt to the evolving market landscape, investors can expect the company to remain a strong performer in the GPU industry.