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Nvidia partners with AT&T, Samsung on GeForce gaming platform

Yahoo Finance's Brad Smith details one of Nvidia's latest unveils at the Consumer Electronics Show (CES) 2022, as it partners with tech companies and video game developers for its GeForce gaming platform.

Video transcript

[MUSIC PLAYING]

ALEXIS CHRISTOFOUROS: After the upward trend Nvidia saw during 2021, shares sputtered during the final weeks of the year and then slid their way into the new calendar year. Despite the recent move lower, an analyst at Citi has turned bullish on the chip-maker following its announcements at CES. Yahoo Finance's Brad Smith joining us now with some more details. Hi, Brad.

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BRAD SMITH: Hey, Alexis. Well, Nvidia shares have slid into 2022, selling off by about 17% from some of those $330 per share levels in November of 2021. Now, unbothered by the move lower over recent weeks, Citi analyst Atif Malik opened a positive catalyst watch, citing management comments on the strong holiday season, data center demand trends, and foundry supply improvements in the second half of this year.

CES brought a big announcement from Nvidia in the realm of GeForce Now as well, Nvidia's cloud-based game streaming service. And this year, the company unveiled a partnership with Nvidia's GeForce and AT&T 5G customers and GeForce Now to be streaming on Samsung TVs later on this year. So those are some of the developments coming, at least out of CES most recently, that one analyst at least caught wind of and continues to be bullish around right now, Alexis.

KARINA CONTRERAS: Then hey, Brad, let me jump in. What sort of partnerships like this could help contribute to Nvidia's future as a game developer?

BRAD SMITH: Yeah, that's a great question and really around the significance of this too. Gaming as a whole over the past two years has witnessed heavy talent acquisition away from some of the largest production houses, an acceleration of mobile device arcade titles, and increasing demand for gaming within VR headsets as well. So talent-wise, this prompts even more competition to hire specifically for in-house title development, thinking along the lines of how Netflix, Amazon, and Apple did so similarly for their own content production.

Similar efforts have been done on the gaming side. It also signifies how Nvidia is creating a commanding position to choose specific titles from existing game developers that it wants to license, which raises the question of how many and which titles from existing production entities, like Activision-Blizzard and EA and Take-Two Interactive will see the sustained levels of revenue, where other titles may facilitate a headwind to margins.

And then just lastly on the significance of these announcements too, for one, Nvidia has been vocal about wanting to create more partnerships directly with game developers, positioning them to circumvent the gaming console hardware as we've known it for decades. The streaming solution powered by their data center is the console that they want us to think about.

And so as of the most recent earnings report, which would have been their third quarter for fiscal 2022, GeForce Now membership had more than doubled year over year to 14 million gamers streaming content across 30 data centers in over 80 countries.

ALEXIS CHRISTOFOUROS: All right, Yahoo Finance's Brad Smith. Good to have you on the show. Good to have you be part of the team here. Thanks for that report.