GPU Companies Are On the Rise
Why it’s a Good Idea to Invest Now
Now that we’re half way through 2017, it’s time to once again look into the future. There, I see a few high-tech markets growing and a certain group of companies reaping the benefits of such growth. Because of this, I think it would be a good idea to invest in GPU manufacturing companies like AMD ($AMD) and Nvidia ($NVDA) now.
But why should you invest in these corporations? Market expansion. A large contributor to Intel’s growth in the early and middle 2000’s was the growth of the PC market, and much of Qualcomm’s growth can be attributed to the growth of the mobile device market. So as you can see, chip manufacturers achieve much of their growth from increases in demand stemming from the increasing performance needs of our gadgets.
But how will major GPU manufacturers play into this? Well, their chips will become much more prevalent. As the explosive expansions of PC and mobile slow down, three high volume markets will see large booms in the near future: Artificial Intelligence, Virtual Reality, and Cryptocurrencies.
One of the most essential components of the field of AI is model training. As more data is amalgamated and stored for machines, the ability to process the data quickly and efficiently becomes increasingly important for individuals and organizations who wish to make sense of it. A few years ago, training machine learning models was performed on laptop CPUs. This may have worked in a handful of cases, but with the rise of big data this hardware can’t hold up. Nowadays, GPUs have become standard hardware within the field of Artificial Intelligence. Their high performance capabilities suit them well for this task. They can store and process data at much quicker and more efficient rates, making them the best choice for the job. And, this has given rise to chip specialization, as can be seen with Google’s Tensor Processing Unit (TPU), which will induce hardware innovation in the high performance chip market and could mean more growth in the field. Nvidia has already put its foot in the door of AI with GPU-based cloud AI supercomputers, so I would expect more companies to do the same to enforce competition.
Another area where CPUs can’t compete, Virtual Reality is a computationally demanding technology that includes a multittude of complex tasks such as head tracking, texture rendering, and more while maintaining a high frame rate. Essentially, VR takes all of the complications of gaming and compacts them into a small, modular device (which is hard). And just like conventional gaming, GPUs will be the de facto performance chip for virtual reality. Because VR is already growing at a rather fast pace, high performance chipmakers currently have presence in today’s VR headsets. Nvidia and AMD are already competing for control of headsets like the HTC Vive and the Oculus Rift.
Whether you believe in their value or not, there’s no doubt that crypto currencies are a rapidly expanding market with growing attention. And, GPUs have presence in this area too. To bring these coins into circulation, they need to be mined. Mining digital currencies is the act of performing computationally intensive tasks to be rewarded with new issuances of the coin. Because this is such an exhausting task, GPUs are very common in this area. As the total market cap of these currencies rises, the need for bringing the more coins into existence follows. Thus, an increasing demand in GPU-based hardware will ensue.
While their current value is mostly derived from personal computers and gaming, Graphics Processing Units will see sharp increases in demand in the near future. Companies such as AMD and Nvidia will likely see noticeable growth in market cap because of the increasing popularity of Artificial Intelligence, Virtual Reality, and Cryptocurrencies. You should probably invest now. You could buy shares of the companies, or you may prefer buying the cards themselves.
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