NVIDIA is Crushing AMD and Intel At Their Own Game

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NVIDIA ( Nasdaq: NVDA ) has spent years building up a platform that can create a competitive moat against competitors. That platform includes software like CUDA and NCCL in addition to networking products. We explore recent performance benchmarks around NVIDIA's new "Grace" CPU, which is another aspect of their platform strategy. In testing, the chip performs very competitively with offerings from AMD ( Nasdaq: AMD ) and Intel ( Nasdaq: INTC ). NVIDIA's CPU Ambitions and GB200 Sales Are a Massive Driver for the Stock

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Here are some highlights from the discussion with 24/7 Wall Street Analysts Austin Smith and Eric Bleeker.

• All the excitement today in the chip space is around GPUs, and for good reason. Last quarter NVIDIA saw 427% from its data center group selling their high-end GPUs.
• AMD is seeing their strongest growth from high-end GPUs used for AI workloads, and Intel is trying to break into the market.
• Yet, the traditional “battle” in the server space has been both Intel and AMD making x86 CPUs, or central processing units. Historically, that was always the kind of “gold mine” in the space.
• Today, GPUs have quickly surpassed CPU sales and NVIDIA has somewhere between an 80-85% revenue share in data center processing now.
• The product NVIDIA investors are most excited about is generally their Blackwell GPUs, which NVIDIA CEO Jensen Huang has described as the “ most successful product in their history and for the entire history of computers ."
• But here’s something important. Many investors tend to focus entirely on just NVIDIA's new GPU that's on the horizon. That's the B200.
• However, the first product NVIDIA is releasing is the GB200. The company emphasizes this product is a platform. So, on NVIDIA's GB200 NVL72 you'll find:
  • 36 Grace CPUs
  • 72 Blackwell GPUs
  • Rack scale design led by NVIDIA
  • Liquid Cooling
  • NVIDIA Networking and interconnects
• So, you can see why NVIDIA calls this a platform, it has so much technology beyond just the GPU.
• But here's the important point and why NVIDIA is competing so well with AMD and Intel on their "home turf." The name of the system - the GB200 - stands for Grace Blackwell.
• Grace is the name of NVIDIA's CPU. It gets equal billing alongside the GPU on this system.
• And performance tests from the website WCCFTech have NVIDIA just barely behind a 96 Core Threadripper from AMD and slightly above a 56 Core Xeon processor.
• Now, benchmarks can’t capture performance across all the scenarios you’d see in servers. Yet, NVIDIA famously tried buying ARM Holdings ( Nasdaq: ARM ). They clearly care about their CPU designs!
• The performance of their Grace CPU is just another illustration of how well the company is executing not just in GPUs, but also in areas like networking and software.
• Reports from Taiwan have NVIDIA readying upward of 40,000 GB200 systems that cost up to $3 million each.
• The GB200 is a very important product launch to watch in the next six months. You do the math and NVIDIA could make upwards of $75 billion in gross profits from the launch of this one product alone.
• For perspective, NVIDIA made $60 billion in gross profits in the last 12 months on all products combined.
• Then, they'll roll out the B200 after GB200 sales start.
• So, this is big. In addition, NVIDIA executing so well in something like designing the CPU shows exactly why they’re going to be so hard to take market share from.

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