5-Year Horizon for the GPU giants
Nvidia and AMD are both on a roll these days. The GPU giants have reached gigantic valuations in the public markets and leveraged their skyrocketing share prices to buy out strategic emerging chip companies. For example, AMD just announced the acquisition of Pensando for $1.9B, while Nvidia has notoriously paid billions for Mellanox last year, and snapped up Excelero just a month ago. This hot M&A market (excluding the $40B ARM deal that fell off due to regulatory concerns) makes me think about the next targets of Nvidia and AMD.
One obvious candidate is Unity Software, which is the Adobe of video gaming with its toolset that allows developers and designers to create videogames on a multitude of platforms, whether it’s casual gaming on smartphones, or powerful games on XBox and Playstations. Similarly, the Unity platforms work well on VR too. Hence it can be used to create VR/AR content for Oculus, Halolens, and others. Thus, you can call Unity a “metaverse enabler” too.
For these reasons, not only does Unity fit well with Nvidia’s current gaming focus, but also it is its future thanks to Unity’s stronghold in VR developer ecosystem.
Jensen Huang always defines Nvidia as a software company rather than mere hardware because its success depends on a myriad of software the company invented, including CUDA.
Mark Zuckerberg notoriously tried to snap up Unity before.
These are not the best days for the markets, given the war in Ukraine and the inflation rates (and increasing interest rates) make the investors run to more stable assets. This makes these days the best times for M&A, as shown by Elon Musk’s personal interest in $TWTR. In my opinion, Intel, AMD, Nvidia, Meta, Microsoft, Alphabet, and Adobe will soon compete to grab this vital piece of the VR future. Heck, even Amazon maybe… didn’t they buy Twitch?
Disclaimer: This content is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only.
