And why should we care
Our best new investment for 2017 is Nvidia. Their traditional business is designing and producing graphics processing units (GPU), used for rendering the highly realistic images used in video games.
It turns out that those same GPUs can be used in what is called “Machine Learning”. Instead of using the GPU chip to draw a beautiful image, the same GPU can be turned on its head and used to interpret what it “sees” in the real world. Instead of creating the image of a 3-D cat and making it move realistically, the GPU can identify a real cat by analyzing a video or a collection of cat pictures.
Here’s what it looks like in the real world – Product Search Video
Let’s break that down to see what happened. First, I opened the Amazon app on my phone’s home screen.
Then I touch and open the camera within the Amazon app.
The camera opens and begins analyzing my can of shaving cream. The little white dots are significant identifying marks that will be analyzed by the Nvidia GPUs running on Amazon’s computers.
Once the Amazon computers recognize the image, they search for a similar, or identical, item and present it to the customer. The item can then be ordered with a couple more taps.
No one wrote a program telling the Amazon computers what a can of Barbasol looks like. The computers have “learned” what that image is (by having previously been shown many images of shaving cream cans) and they then figure out where to find it on the Amazon website.
The key to this bit of magic is the GPU built by Nvidia. The same process might be used in self-driving vehicles—dozens of cameras feeding huge amounts of data to the GPU, which interprets the world detected by the cameras.
I know – not easy to picture. But all the major car manufacturers have partnered with Nvidia and are currently running tests.
Nvidia grew its sales by nearly 40% last year and profits by 138%, while sales to data centers like Amazon’s have tripled. The future looks about as bright as the recent past for this company.
Daniel A. Ogden
Disclosure: Dock Street Asset Management, Inc. and our clients own Nvidia (NVDA) and Amazon (AMZN). This article is not intended to be used as investment advice.