Nvidia's Pricing Power Isn't What It Used to Be
Nvidia (NASDAQ: NVDA) has extreme pricing power in its data center GPU business. The company's ultra-powerful data center GPUs have become the standard way to train advanced artificial intelligence (AI) models, and demand has exploded amid the AI boom.
A very different story is playing out in the gaming GPU market. During the pandemic, a combination of strong demand, supply chain issues, and a cryptocurrency bubble pushed graphics card prices into the stratosphere. This favorable environment for Nvidia has since disappeared.
Demand tumbled as the PC market went through a major correction, supply chain issues were largely resolved, and cryptocurrency fell out of favor. Global shipments of graphics cards tumbled 38% year over year in the first quarter, according to Jon Peddie Research.
Source Fool.com
