Graphics chipmaker NVIDIA (NASDAQ:NVDA) recently reported strong financial results. Its performance in its most recent quarter -- as well as its outlook for the coming quarter -- handily beat Street expectations. It's unsurprising, then, that the company's shares are currently trading up nearly 10% following the report.
Although the raw financials tell investors much of what they need to know, listening to management's commentary during the earnings call often helps to fill in critical details. With that in mind, here are three items from the call that stood out as particularly interesting.
Thoughts on FPGAs versus GPUs for acceleration
On the call, analyst Joe Moore asked NVIDIA CEO Jen-Hsun Huang for his thoughts on the value proposition of the company's Tesla co-processors relative to field programmable gate arrays, or FPGAs, in light of Intel's (NASDAQ:INTC) acquisition of FPGA specialist Altera (UNKNOWN:ALTR.DL).
"An FPGA is a configurable computer, and so if you don't have that many different types of algorithms, and you can afford the expense and the difficulty of designing an FPGA, you can get results," Huang said. However, he went on to suggest that, for situations where a user has a large number of different algorithms and is "changing [its] algorithms on a regular basis," then Tesla co-processors can deliver more performance.
Recovery in the non-gaming GPU segments?
In the most recent quarter, NVIDIA reported that its gaming-oriented graphics processor sales grew significantly year over year, but that the company's other GPU businesses -- namely Quadro, Tesla, and PC OEM -- saw year-over-year declines.
The gaming business grew briskly enough to carry the company's overall GPU business to year-over-year growth, but it's still important to get a handle on what's going on with those other segments, as they comprise non-trivial portions of the company's business.
Company CFO Collette Kress said that revenue from its High Performance Computing and Cloud -- i.e. Tesla accelerators -- declined 15% year over year, to $62 million, "reflecting lumpiness from major deep learning projects." Despite the year-over-year decline this quarter (following 57% year-over-year strong growth last quarter ), Huang said that the business is a "growing business," which seems to imply that he expects that sales of its Tesla co-processors should see growth for the full year.
NVIDIA's workstation graphics business (Quadro) has seen year-over-year declines for the last two quarters. Huang expressed uncertainty as to when enterprise workstation demand would spring back, but indicated that the company will do "very well" once the secular tide begins to turn.
Finally, commenting on the PC OEM business, Huang seemed to express cautious optimism around the potential growth that the combination of the Windows 10 operating system and Intel's new Skylake processors could bring to this market.
Automotive growth looks good
Kress reported on the call that sales of processors into automotive applications surged 76% year over year, to $71 million. Looking ahead, Huang pointed out that, on top of the company's "infotainment cockpit business," more than 50 companies have expressed interest in using its DRIVE PX automotive development platform as part of their self-driving car efforts.
Commenting on the dollar content that NVIDIA sees per car, Huang didn't give specific numbers, such as an average. However, he did make an interesting case for the increasing computer hardware and software content inside of cars.
"I think your car's going to become a software-defined car, and the amount of processing inside will continue to grow at an exponential level," Huang said.