How can Nvidia (NVDA) do it? How can it surprise again? What's driving it?
How about every single trend that's hot, every single trend that could end up being what the future looks like?
Last night, Nvidia and its amazing CEO, Jensen Huang, put on a clinic about the future and where Nvidia plays in it, or I should say dominates in it, along the way putting up 49% year-over-year growth in this not insubstantial company, with $1.94 billion in revenues this quarter alone.
Here's how the company did it:
First, gaming, which was up 49%. It's got amazing chips for the gaming business, ones that turn your PC into a monster-fast machine or can power the new Nintendo Switch, the hottest console in the universe.
It's being driven by what the company called the "headlong growth in e-sports." Get used to the term MOBA -- the Multiplayer Online Battle Arena, because it is growing lightning fast. Or, as Huang put it: "With apologies to the start of the baseball season, e-sports is now as popular among the U.S. male millennials as America's favorite pastime."
How popular is it? "More people will be gaming than HBO, Netflix, ESPN and Hulu combined," Huang told us. And this trend could only accelerate with some of the new games coming out of Electronic Arts (EA) , which, you could tell from its amazing conference call, is clearly benefitting from Nvidia's speed, with Star Wars Battlefield 2 needing this company's chips to accelerate play.
Next is professional visualization, where its chips are in as varied usage as to be used by Lockheed Martin (LMT) for reliable visual reality for the U.S. Navy and by Ikea for demonstration options.
Then there's the data center, where its business is now three times greater than a year ago. Amazon (AMZN) Web Services, Action Alerts PLUS holdings Facebook (FB) and Google (GOOGL) , as well as IBM (IBM) and Microsoft (MSFT) , all rely on its chips to power their clouds, because of Nvidia's artificial intelligence prowess.
Finally, there is the auto business, which his growing at 24%, and the company's in 225 cars and trucks, winning business this quarter from Bosch, which is the world's largest auto supplier, and Paccar for big trucks.
Huang made it clear that because of the Amazon effect and a shortage of professional drivers, you will need artificial cars and trucks to power everything from shuttles and vans to pizza delivery.
I came away from this conference call, which clearly won the night, recognizing that Nvidia's ahead of everyone else right now in these key areas , because of the intellectual property in its chips and its prowess in artificial intelligence. This is so necessary, the CEO points out, for devices like the Echo with its Alexa network and for souped-up gaming, which is something that 30 million people now engage in.
More important, the fact that all of the cloud providers choose this company is a sign of its indispensability. It's not that it's in the hot areas, that's a mistaken way to look at this company's dominance. It's that its customers need its technology to compete and to stay even with one and another.
You don't use Nvidia, you won't be able to win the enterprise or the consumer. No wonder the stock increased the most in the S&P 500 last year and is jumping so high today. Artificial intelligence is here, and you could argue it's here because of Nvidia's processing power allows it to be. I doubt that any customer would disagree.
Cocktails & Cramer
Join Jim Cramer on May 23 for an exclusive party at Bar San Miguel, his Brooklyn tavern.
You'll get to watch a screening of Mad Money, after which Jim will arrive fresh off of the CNBC set to mingle, pose for photos and answer your investing questions.
Participants will enjoy dinner, drinks, an autographed copy of Jim's book Get Rich Carefully and a free one-year membership to Action Alerts PLUS, Cramer's VIP club for investors. (Current AAP members will receive one extra year of membership for free.)
When: Tuesday, May 23, 6 p.m.-9 p.m. EDT
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
Cost: $375 per person
Space is very limited, so click here to reserve your ticket to this exclusive event today.