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NVIDIA & Microsoft Intend to Democratize Use of Supercomputer

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NVIDIA (NVDA - Free Report) recently rolled out “a new kind of” Microsoft (MSFT - Free Report) Azure-based GPU-accelerated supercomputer, at Supercomputing 2019 event held at, Denver, CO.

Per the new concept, customers will be able to rent the new AI-driven supercomputer on demand, and instantly access capabilities of deploying large-scale complex high performance computing (HPC) workloads on Azure.

The new supercomputer is based on “800 NVIDIA V100 Tensor Core GPUs interconnected on a single Mellanox InfiniBand backend network.”

The latest offering accelerates conversational AI modeling, ML and deep learning applications, and large-scale simulations, among others, by utilizing multiple NDv2 instances.

Moreover, NDv2 instances facilitate access to Azure Marketplace and NVIDIA NGC container registry. Through this users can access frameworks like TensorFlow, PyTorch and MXNet to seamlessly deploy the large-scale workloads. Notably, NDv2 is available in preview.

We believe attempt to democratize the utilization of supercomputer and enable companies to access it robust capabilities according to demand, while reducing infrastructure expenses, favors business prospects.

Portfolio Strength Holds Promise

NVIDIA’s presence in supercomputing market on strength in its accelerators and latest Tesla V100 GPUs is noteworthy.
 

Markedly, NVIDIA GPUs feature in 136 systems out of 145 TOP500 supercomputers that utilize accelerator technology. Further, acquisition of high-speed interconnects and networking solutions provider, Mellanox, is expected to provide NVIDIA a competitive edge in the domain.

Moreover, growing proliferation of AI techniques and ML and deep learning tools in data center, cloud computing; gaming, automotive, and blockchain are driving GPU demand, which favors NVIDIA’s growth prospects. Per data from Global Market Insights, as revealed by MarketWatch, GPU Market is anticipated to hit $80 billion by 2024 at a CAGR of over 31% between 2018 and 2024.

Additionally, NVIDIA dominates the GPU market on account of the significantly higher functionality of its GPU cards. Per latest JPR report, Advanced Micro Devices (AMD - Free Report) held discrete GPU market share of 32.1% in second-quarter 2019 compared with NVIDIA’s 67.9%.

Wrapping Up

NVIDIA is leaving no stone unturned to explore new growth avenues for its GPU business in domains such as inference, data science and ML techniques to consolidate presence in this niche market.

Considering latest developments, NVIDIA’s GPUs are likely to help the company capture a larger share of market as it is preferred most by the datacenter operators.

However, the company is likely to face pricing pressure, which might weigh on profitability, as Intel (INTC - Free Report) and AMD pose significant threat in supercomputing and HPC market, with recent deal wins.

Zacks Rank

NVIDIA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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