Largest graphics card manufacturing company NVIDIA Corporation (NVDA) recently announced the launch of GeForce GTX 590, the fastest and quietest dual graphics card. This new graphics card provides enhanced performance, with the use of dual NVIDIA Fermi-class GPUs, specially designed for gaming enthusiasts and those interested in the PC gaming circle.
The technical specifications of the product are quite impressive, having 1024 NVIDIA CUDA architecture cores, with 3GB memory, 6 billion transistors and over 2200 individual components in an 11 inch dual card slot. This new product has been priced at $699, and is available from the world’s leading add-in card partners, including Asus, EVGA, Gainward, Gigabyte, Inno3D, MSI, POV, Palit and Zotac.
We believe this will create some renewed interest within the gaming fraternity, as it will take the gaming experience to a new level. NVIDIA has a strong position in the market for high-end discrete graphics, especially for the gaming segment. Its GeForce line of graphics cards is essential for playing some of the most popular computer games today.
We expect NVIDIA to maintain its advantage in the gaming segment in the foreseeable future. This apart, the company had previously launched GeForce GTX 570 and GTX 560 Ti, two of the most advanced GPUs for gamers. This enhancement in the GeForce series is expected to attract more customers in the near future.
It is therefore likely that NVIDIA will have a larger share of the market for GPUs that are actually in use than estimated. Moreover, the company is also developing new CPU cores based on the ARM architecture for PCs and servers, which are expected to run on Microsoft‘s (MSFT) upcoming Windows OS. This integration of CPU with GPU is expected to develop a power efficient chip, which might help the company to further strengthen its position in the gaming market.
NVIDIA seems to have the right business approach, targeting some of the most significant growth areas in technology. These include cloud computing, mobile Internet and energy efficiency. While this will no doubt enhance its brand equity, we might notice a meaningful rise in research and development expenditure moving forward.
However, NVIDIA’s performance may be slightly tempered by the economic slowdown in Europe and increased competition.
The company has Zacks #2 Rank (short-term Buy recommendation).
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