Nvidia's Gaming GPUs Overlooked as AI Takes Priority
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NVDA?
Source: Newsfilter
- Market Shift: Nvidia's data center segment now accounts for 91.5% of its revenue, indicating a strategic pivot towards AI, which has led to a slowdown in the development of gaming GPUs and may alienate its original gamer base.
- Release Delays: Analysts predict that 2026 will mark the first year in three decades without a new generation of GeForce graphics cards, reflecting a significant strategic shift as Nvidia prioritizes AI chip demand over gaming products.
- Memory Shortage Impact: Due to a shortage of Dynamic Random Access Memory (DRAM), Nvidia plans to cut production of its latest gaming GPUs by up to 40%, which will directly affect consumer purchasing power and market availability.
- Innovation Controversy: Nvidia's latest DLSS 5 rendering software has sparked concerns among gamers about the use of generative AI to alter game art, potentially undermining the creative freedom of developers and highlighting the tension between technological advancement and gamer expectations.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 198.350
Low
200.00
Averages
264.97
High
352.00
Current: 198.350
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Release Delays: Analysts predict that 2026 will mark the first year in three decades without a new generation of GeForce graphics cards, reflecting a significant strategic shift as Nvidia prioritizes AI chip demand over gaming products.
- Memory Shortage Impact: Due to a shortage of Dynamic Random Access Memory (DRAM), Nvidia plans to cut production of its latest gaming GPUs by up to 40%, which will directly affect consumer purchasing power and market availability.
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- Market Shift: Nvidia's revenue is now almost entirely derived from AI products, with the gaming segment no longer being the primary driver, leading to feelings of neglect among its original gamer base, which could impact long-term brand loyalty.
- Margin Discrepancy: Nvidia's operating margins in its compute and networking segment average 69%, compared to just 40% for its consumer graphics segment, indicating a strategic shift towards the more profitable AI market, potentially weakening its investment in gaming.
- Product Release Delays: Analysts predict that 2026 will mark the first year in three decades without a new generation of GeForce GPUs, despite the company claiming ongoing innovation and testing, which may lower gamer expectations for future products.
- Memory Shortage Impact: Due to a shortage of Dynamic Random Access Memory (DRAM), Nvidia plans to cut production of its latest gaming GPUs by up to 40%, which will directly affect consumer purchasing power and market supply.
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- Market Shift: Nvidia's data center segment now accounts for 91.5% of its revenue, indicating a strategic pivot towards AI, which has led to a slowdown in the development of gaming GPUs and may alienate its original gamer base.
- Release Delays: Analysts predict that 2026 will mark the first year in three decades without a new generation of GeForce graphics cards, reflecting a significant strategic shift as Nvidia prioritizes AI chip demand over gaming products.
- Memory Shortage Impact: Due to a shortage of Dynamic Random Access Memory (DRAM), Nvidia plans to cut production of its latest gaming GPUs by up to 40%, which will directly affect consumer purchasing power and market availability.
- Innovation Controversy: Nvidia's latest DLSS 5 rendering software has sparked concerns among gamers about the use of generative AI to alter game art, potentially undermining the creative freedom of developers and highlighting the tension between technological advancement and gamer expectations.
See More
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- Cloud Platform Advantage: Amazon and Alphabet's cloud computing platforms are favored for their custom AI chips, which provide better performance and lower costs compared to Nvidia GPUs when properly configured, ensuring significant growth potential for their cloud computing businesses.
- Core Business Support: Both companies are funding their data center buildouts using cash flows from their core businesses rather than relying on massive debt, a strategy that enhances their financial stability and supports the expansion of their cloud computing divisions.
- Optimistic Market Outlook: As demand for AI computing power increases, Amazon and Alphabet's cloud computing businesses are set to grow, and their investment in Anthropic positions them to outperform the market over the next five years, potentially yielding substantial returns.
See More
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- Cloud Market Advantage: The custom AI chips from Amazon and Google outperform Nvidia GPUs in both performance and cost, ensuring sustained growth in AI computing demand, which enhances the profitability of their cloud computing businesses and solidifies their market positions.
- Robust Funding Sources: Both companies are funding their data center buildouts using cash flows from their core businesses rather than relying on massive debt, a strategy that not only reduces financial risk but also provides strong support for future cloud expansion.
- Optimistic Market Outlook: As demand for AI computing power increases, Amazon and Alphabet's cloud businesses are expected to experience rapid growth, and their investments in Anthropic make them likely to outperform the market and achieve significant returns over the next five years.
See More
