Chipmaker NVIDIA (NASDAQ:NVDA) has engineered a remarkable turnaround. It looked as if the company's Tegra business would capsize after a woeful performance in the second quarter, when revenue dropped 71%, year over year, to just $52 million. NVIDIA was feeling the heat from Qualcomm as it lost the spot in the latest Nexus 7 device, but the company bounced back tremendously. In addition, NVIDIA entered into a partnership with International Business Machines (NYSE:IBM) and saw Amazon.com (NASDAQ:AMZN) validate its GRID technology.

Tegra bouncing back
Most importantly, NVIDIA's Tegra revenue doubled sequentially in the previous quarter, indicating that it is now finding acceptability after Google's snub for the latest Nexus 7. Fifteen different mobile devices used the Tegra 4 chip, including those made by Xiaomi, Asus, and Microsoft.  

Xiaomi proved to be a big win for NVIDIA as the Tegra-powered Mi3 smartphone sold out the first 100,000 units in 86 seconds. Xiaomi has been very successful in China and it surpassed Apple's market share in the region earlier in 2013.This was a key win for NVIDIA that could help it generate more business going forward. Also, NVIDIA's reference platform for Android-based tablets, the Tegra Note, is also finding good traction. NVIDIA has more than 10 partners on board for the Tegra Note tablet platform. 

The growing demand for Android tablets -- and the presence of key Android-powered tablet makers such as Asus and Acer on the client list -- has helped NVIDIA's Tegra gain more traction. Although Asus and Acer together accounted for just 10% of the tablet market in the third quarter of 2013, they have been growing at a brisk pace.Going forward, NVIDIA expects the momentum in Tegra to continue.

GPU growth continues
More impressively, NVIDIA's graphics processing unit (GPU) segment is growing even though the overall gaming market is declining. According to NVIDIA, PC gaming accounts for 40% of the overall gaming market and it is still growing, driven by massively multiplayer online games. Moreover, NVIDIA is seeing robust demand for its workstation and server GPUs -- the Quadro and the Tesla.

NVIDIA saw record sales of Quadro and Tesla due to a new product introduction and an increase in demand as a result of growth in big data. The prospects here look bright as well. NVIDIA landed a big win when IBM announced that it will be using the Tesla GPUs in its servers instead of Intel's.  

IBM is looking to rescue its hardware business after it crashed 38%, year over year, in the previous quarter. As such, IBM had to offer something distinct to clients, which is why it went for NVIDIA's Tesla to accelerate its enterprise software. According to Foolish colleague Timothy Green, "This move makes it easier for companies to reap the benefits of GPU acceleration, and it gives them a reason to buy IBM's Power servers."

In addition, NVIDIA's GRID also received a shot in the arm from Amazon when its web services division announced the Amazon Elastic Compute Cloud, or Amazon EC2. Amazon has designed this new service for applications that would need 3-D capabilities.According to Amazon, "Customers requiring high parallel performance capability will benefit from GPU instances..." and it has chosen NVIDIA GPUs for this purpose. Amazon says that EC2 will provide customers with access to GPUs that have up to 1,536 CUDA cores and 4GB of video memory.  

This is a pretty big endorsement of NVIDIA's GPUs and should help the company in finding more traction in the high-performance computing, or HPC, segment going forward. NVIDIA currently has 212 customer trials for the GRID in progress, up from 150 in the preceding quarter. The company cites that major server OEMs -- Cisco, Dell, IBM, HP, and others -- are promoting grid for PC virtualization, and NVIDIA is hopeful that its accelerators will see better business as a result. 

Final words
Another great thing about NVIDIA is that it is quite shareholder-friendly. The company has a dividend yield of 2.10% and recently raised $1.3 billion in the form of convertible senior notes to give back to shareholders, as most of its cash resides outside the U.S.

NVIDIA gained close to 30% in 2013, and it looks like the company is finally seeing good business in all its segments. It is intent on delivering value to shareholders and has struck some key partnerships. It woouldn't be wrong to say that 2014 could be NVIDIA's year.

Harsh Chauhan has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Nvidia. The Motley Fool owns shares of Amazon.com and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.