Nvidia announces Q3 results, looks to microservices for future growth

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Largest growth area in Q3 was the Gaming sector.

Nvidia announced surprisingly strong third quarter results this week, with CEO Jensen Huang painting a rosy picture for the future.

The company beat Wall Street expectations and posted a record revenue of $4.73 billion, a whopping 57 percent increase year-on-year. Net income was $1.34bn – up an impressive 49 percent year-on-year.

Gaming revenues increased the most. It was up a record-setting $2.27 billion, up 37 percent from a year earlier.

Data centre revenue also reached a record $1.9 billion. This was an eight percent increase over Q2 and up 162 percent YOY. The surge in data centre revenue was helped by the acquisition of Mellanox, which contributed 13 percent of overall revenue.

Nvidia CEO sees increased growth in future data centre sales

As reported in The Register, CEO Jensen Huang said he believes data centres will continue to require Nvidia products for their network and servers. In fact, he sees this area growing even more in the future.

“The vast majority of the world’s data centre is still built for the traditional hyper-converged architecture, which is all moving over to microservices-based, software-defined disaggregated architectures,” he said. Huang believes that change will create demand for faster east-west traffic.

“Imagine building firewalls into every single server,” Huang said. “And imagine every single transaction, every single transmission inside the data centre to be high speed and fully encrypted.”

“A pretty amazing amount of computation is going to have to be installed into future data centres,” he predicted.

Huang thinks a lot of that computation will happen inside data processing units (DPUs). A data processing units is a combination of network card, GPU and SoC. These units have become commonplace in hyperscale clouds.

Huang insisted that DPUs will be necessary because networking and security services can consume between 20 and 40 percent of server capacity. “We’re going to offload that,” he said.

“And I believe therefore that every single server in the world will have a DPU inside someday…because we care so much about security and…throughput and TCO. And it’s really the most cost-effective way of building a data centre. “

“And so I expect our DPU business to be quite large,” Huang concluded.

Tip: Why the acquisition of ARM by Nvidia should be prohibited