Graphics processor veteran NVIDIA (NASDAQ: NVDA) reported second-quarter results on Wednesday, Aug. 19. The results edged out analyst expectations and the headlines highlighted the fact that data center sales outweighed gaming products for the first time in NVIDIA's history.
If you look a little closer at NVIDIA's report and earnings call, you'll find evidence of an even more significant change to the company's business model. Yes, semiconductor designs are still at the core of NVIDIA's day-to-day operations, but the company is also growing its software sales. That road points to wider profit margins and more reliable revenue streams in the long run because most of NVIDIA's software sales are tied to long-term subscription packages.
Image source: NVIDIA.