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self-driving cars super computers cloud computing high level gaming machine learning and computer visualization is all a reality thanks to companies like the one i'm covering today this is the newest addition to my portfolio without further ado let me present to you the world leading semiconductor company and stock market darling nvidia so i like tech stocks and especially ones boasting strong revenue and high investor optimism like nvidia and as for most tech investors i'm sure nvidia just fits perfectly into my portfolio and i've been in and out of the stock since 2017 when it traded below 200 but it's come to stay for good this time i promise you from its gaming routes to modern data centers and self-driving cars i'll cover it all today this is the only video you need to watch on nvidia like the video subscribe if you want to see more drop a comment if you have any opinion or questions on nvidia timestamps in the video description let's get going so nvidia entered the field back in 1993 and was started by the taiwanese american jensen now it started out making graphic processing units allowing computers to for example work in 3d for the first time and through exclusive partnerships with the xbox and playstation gaming system and a plethora i mean plethora of acquisitions and nvidia took a bigger bigger piece of the semiconductor cake and is today um supplying the industry-leading chips enabling things like data centers computer visualization design software autonomous driving medical mapping and even has its own streaming devices today nvidia is the world's leading manufacturer and developer of graphic processing units and they allow computers to process and generate images and they're used in pcs laptops smartphone modern cars and and smartphones and the gpus maker makes up about 85 of nvidia's revenue while the remaining 15 percent is its tegra processors unit now a tegra processor is basically a chip where you put most of the things you need to run a computer and sell that as one piece so they supplied for smartphones personal digital assistants and mobile internet devices so maybe not your pcs and phones but you know just uh various uh electrical devices that also needs to be connected to the internet now nvidia's current line of flagship products include titan geforce quadro data center solutions the shield yetzen uh cloud gpus ai and deep learning hardware and software as well as self driving chips and now for example they also boast the 14 most powerful gpus on the market so although they have competitors that at the high end they are nowhere in sight nvidia really showing who's the daddy in the industry so nvidia makes most of its money from huge companies like hp dell toshiba sony and nintendo and they buy chips from nvidia integra processors and in turn put them into their own devices like pcs gaming systems or smartphones many big automakers as well like mercedes toyota volvo tesla you name them are also buying chips but they put it in their cars so that they their cars can drive themselves one day a notable amount also comes from consumers uh you know uri mostly gamers uh putting nvidia chips into their pc is and laptops to get the most as their gaming experience and although that part has shrunk lately it's still the major part of nvidia's revenue so nvidia is currently sitting at 300 billion dollar market cap and boasts almost 12 billion in our annual revenue uh the share price has surged more than 2 000 in the last five years alone and revenues has almost doubled or even tripled in the same period um so nvidia is really on a roll and investor optimism has hit an all-time high and as we continue our transition to digital society i bet you that this trend will continue and of course i'm an investor so i do believe the stock will keep running higher so this story obviously hasn't played out overnight and although nvidia's core business of gpus have been doing well for decades as of late they've been making more and more money from data centers and automakers for example they also make a lot of money from visualization software and their um ip and oem business and if we look at the revenue growth for the company from 20 2015 to 2020 the revenue has gone from 4.7 to 10.9 billion um their gross profit has gone from 2.6 to 6.8 billion and their operating income has gone from 760 million to 2.9 million now if we break that down into the segments we have gaming going from 2 billion to 5.5 billion visualization 800 to 1.2 billion data centers 380 to 3 billion that's an increase of almost 850 percent it's auto business gone from 183 million to 700 increase of almost 300 percent and it's iem it's uh no sorry it's oem and ip business has only gone from 1.3 billion down to 550 so a decrease of 60 so these are obviously some stunning numbers and together with most other investments investors i'm really eyeing the data centers and auto revenue going forwards as i think that's really what the world is craving right now and with the recent acquisition of melanox nvidia is going deeper into the data center industry which i think is the way to go and they're also looking at acquiring arm and there's some really cool opportunities in the future for acquisitions for nvidia uh and i think data centers are the power mills and uh really the grid of the future all major companies name any big company they need their own data centers or they need to uh lend them from someone else but regardless you need the hardware and the software to actually um run these data centers so nvidia is really a picks and shovels play for the digitalization of the world which has only accelerated during covert nvidia's future in the auto industry can also give the company a leg up i mean sure tesla will probably go off into the sunset with their own chip with their self-driving cars but after that happens every single automaker will need to develop a self-driving car and regardless of who gets there first they will all need the hardware to actually operate these cars and they need chips that can that can process billions of billions of impressions per seconds i think it's even hundreds of billions and can you see automakers making their own chips ah probably not so they're gonna turn to nvidia so in this crazy race of uh not just get being the first to self-driving cars but getting self self-driving cars at all they're all looking to nvidia and they have partnered with volkswagen volvo audi mercedes-benz and toyota i mean look at that list now besides this high-end gaming has been the big revenue uh segment for nvidia over decades and i see this continuum as game games become more and more demanding on the gaming systems the hardware will need to keep up to give you the best gaming experience and streaming esports and super popular games like fortnite league of legends and call of duty will continue to attract new gamers be it to mobile gaming pcs or gaming systems and then again if you want to go for that high high end performance nvidia is still the way to go now time for some more numbers i gave you a little break from numbers here so the operating cash flow has gone from 906 million to 4.77 billion in just five years their capital expenditures so how much they're spending has gone from 122 million only up to 500 million quite small numbers and their free cash flow has gone from 780 billion to 4.3 billion so that's what they're left with each year after all expenses so across the board their balance sheet really shows no sign of weakness and although the growth hasn't really tapered off yet it is expected to go down quite significantly but their cash pile has been growing and the important thing to note about nvidia is that they are fantastic at spending that money so you don't have to worry about a cash pile piling up or them having to pay out dividend or you know just making boring stock buybacks this company is making acquisitions and driving innovation which is what you want to see and the company has also been highly profitable so sure the revenue has been growing but they've also been left with more and more money so their gross margin is of 62 is fantastic and their operating margin as well as their profit margin is about 26 which is still quite high considering it's mainly a hardware company which usually has lower margins than a software company so this has resulted in a cash pile of about 11 billion dollars u.s which is about the same as the revenue so even after all their acquisitions they still have billions and billions in the bank now nvidia's competitors are plenty and quite tough you can name amd intel qualcomm silence broadcom and the list goes on and on but i i really only consider intel and amd to be serious competitors to nvidia and the gpu market is expected to grow so i think that the pi is big enough for all of them and although am amd's market share has gone from like 22 to what 26 over the last four or five years you know i think the market is more than big enough for all of them and you have a bit of a trifecta here with intel amd and nvidia you know sort of leap frogging each other one day you know amd comes out with a powerful chip then nvidia comes out with an even more powerful chip so i think the compet competitive landscape seems very healthy there's plenty of actors on the market um but still in this tough environment nvidia has been doing great for decades so i see no reason to worry about amd or intel actually and with the demand for gpus and tegra processors continue to surge from all parts of the economy all over the world any size company they need hardware and i think intel amd and nvidia will have their hands full trying to meet the demand and just like we all of a sudden have self-driving cars which needs the soft the hardware from nvidia in five years there might be something else that needs uh nvidia's hardware so there's always going to be these new pockets of opportunities popping up just like we had the bitcoin mining two or three years ago now we have self-driving cars so uh the the pi is so large and i think nvidia just needs to run as fast as they can so my bet is that nvidia uh in five to ten years will still be the world leader in gpus and i see um increasing uh demand in all the uh segments gaming self-driving cars and data centers i think are all part of a secular trend of digitalization and i think uh nvidia with their unbeaten scale and innovation and their um massive taste for acquisitions will be the first in line to meet this growing demand and if you put a strong balance sheets and a founder ceo as well as cutting edge innovation on top of that you have yourself a no-brainer ladies and gentlemen um this is a big u.s tech company with strong growth strong management strong innovation they're in the secular trend they have a great brand i think this is the full package and together with amazon microsoft and tesla nvidia will be one of my four or five staple core holdings that i will just buy for as long as i can and for as much as i can and it's my big bet on sort of the web 2.0 or you know the the future of the world because the need for software and hardware is through the roof so i want you i want for this video i want to know how many nvidia shareholders are there out there of you watching my videos uh why are you invested in video why aren't you hope you enjoyed this video uh this was one of my biggest videos yet so please give me a thumbs up subscribe if you want more give me a topic for next video and as always i'll see you on that one
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