Nvidia to Hit $1 Billion in Annual Cloud Revenue

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If there was any doubt about the growth of the cloud industry, the past year has since quieted any naysayers. The cloud Computing Index Fund SKYY is trading at an all-time high. The cloud managed services market alone is slated to reach about $120 billion annually by 2020. There have been several rumors regarding a Salesforce buyout, most recently involving Microsoft. Companies are either scrambling to get a piece of the cloud action, or they are shifting their attention toward it – both directly and indirectly.
One of the most recent companies that seems to be shifting a majority of their attention to the cloud is Nvidia. They are said to be on track to hit the $1 billion annual revenue milestone. Per a Reuters report, this should happen within the next two to three years. This is due to strong demand for big data analysis, which is driving significant growth in graphic chips.
Nvidia is likely best known for their popular graphics product line “GeForce.” They are heavily involved in GPU (graphics processing units) manufacturing, as well as SOCs for the mobile computing markert. These have been the bread and butter revenue drivers for Nvidia. Due to high demand and volume of internet gamers in which cloud computing plays a sizable role, Nvidia is seeing extraordinary revenue growth from their cloud segment – to the tune of 60-70% growth per year. According to CEO Jen-Hsun Huang, this is by far the fastest growing sector for Nvidia.
Many online games require graphic chips to not only process, but run data heavy apps; these chips need to be able to handle high powered computing. Nvidia has struck quite a few strategic partnerships, most notably with VMWare. Given these partnerships and the subsequent potential reach it affords, it is no surprise that Nvidia is on pace for these kinds of annual cloud revenues.