Nvidia’s Next Big Growth Lever?
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What is Nvidia's new Vera CPU and why is it significant?
What is Nvidia's next big growth lever? You're listening to Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. My name is John Quast and I'm joined today by Foolish contributors, Rachel Warren and Matt Frankel. We have a couple of things to talk about on the show today. We're going to talk about passive investing, we're going to talk about a deal in the homebuilder market, but first, we're going to talk about the bell of the ball and that is Nvidia. NVIDIA over the weekend in Taipei, having a conference event where they announced many things as they are want to do. But one of the big announcements coming out from NVIDIA over the weekend was its new Vera CPU. Now I know full well that NVIDIA is not a hidden company.
It's the largest publicly traded company in the world.
How does Nvidia's Vera CPU compare to Intel and AMD?
But the business has boomed with GPUs or these graphic processing units. This is an announcement for a CPU, a central processing unit, and that's not an area that NVIDIA dominates. Actually, that space is dominated by AMD and Intel, and we'll get to that side of the story here in just a moment. But first, I mean, let's talk about this, Matt. What is NVIDIA's pitch to its customers here on why it should potentially switch to its own CPUs instead of that of competitors?
Yeah, so at a high level, this new chip combines one of NVIDIA's Blackwell GPUs, which you could find in PCs today, with an ARM architecture-based CPU designed by a company called MediaTek, which NVIDIA is partnering on to make this. It's clearly designed to handle AI workloads better than the processors that you see from Intel and AMD, which own over 90% of the market today. NVIDIA claims, for example, it's going to deliver RTX-class gaming, which is the high-end gaming PCs that you've probably seen at Best Buy and things like that, in very thin Windows laptops. It's part of NVIDIA's collaboration with Microsoft.
What is Nvidia's strategy for attracting customers to its CPUs?
I know it's really tough to keep track of all of NVIDIA's various collaborations going on right now, but it made one with Microsoft to essentially reinvent the PC, and this is part of that. It's designed to be a high-end processor. That's the key word. This isn't the $400 laptops. Designed for avid gamers and professionals who really need the ability to multitask and do complex workloads.
Yeah, I think those are really good points that Matt makes. But I think as well, to follow up on that, you know, NVIDIA is making this pitch with the Vera CPU, really kind of trying to fundamentally change what a CPU is supposed to do in this increasingly agentic era of AI. I mean, one of the things here as well to note is NVIDIA is essentially telling data center clients that their old architecture has become a massive bottleneck. So you think of how powerful GPUs handle the core thinking of AI. Autonomous agents also need to execute code, search databases, and really manage these multi-step loops.
What impact could Nvidia's CPU have on the CPU market?
And we're in a time where Legacy CPUs, they crumble under that heavy coordination workload, and it leaves these very expensive GPUs waiting around idly. So NVIDIA is pitching what is essentially a specialized traffic controller that runs these agentic environments almost two times faster than traditional alternatives. So I think that's something else that's really important to take away from this announcement.
Yeah, and I want to go a little bit more hidden gems-y here beneath the surface as we talk about this. And so both Matt and Rachel alluding to this, not all CPUs are created equal. Intel and AMD, as Matt pointed out, 90% of the market essentially, maybe even a little bit higher than that. It's built on a certain kind of architecture that many of us, including myself, don't normally think about. It's not something that is right there on the surface, but it's using that x86 architecture. And basically, it's completely different the way that NVIDIA is approaching it, approaching it with the ARM architecture. architecture and so that does create some i think that in the past investors have always viewed amd and intel as kind of this defensible moat here because its customers would have to change the architecture they can't just plug in nvidia cpus and it's apples for apples switch no you're also changing the architecture that goes behind that
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Chapters
8 chapters
1
What is Nvidia's new Vera CPU and why is it significant?
0:02–0:53
2
How does Nvidia's Vera CPU compare to Intel and AMD?
0:53–1:57
3
What is Nvidia's strategy for attracting customers to its CPUs?
1:57–2:57
4
What impact could Nvidia's CPU have on the CPU market?
2:57–5:27
5
What is Berkshire Hathaway's latest acquisition and its significance?
5:27–6:05
6
How does Berkshire Hathaway's acquisition relate to current market trends?
6:05–8:43
7
What are the implications of passive investing on market dynamics?
8:43–11:31
8
How does passive investing affect stock market behavior during downturns?
11:31–23:17