Hold onto your hats, NVIDIA shareholders, because Amazon.com  may have just made things a whole lot more interesting for your favorite graphics chip specialist.

But first, some background...
Thanks to a stronger-than-expected third-quarter report last week, NVIDIA stock is currently trading within just pennies of its 52-week-high. To be sure, NVIDIA handily exceeded analysts' earnings expectations in a performance owed largely to a long-awaited uptick in sales from its mobile-centric Tegra 4 line.

However, NVIDIA can also attribute those results to its surprisingly resilient GPU segment, which, even in the face of falling PC sales, has managed to maintain much of its prominence thanks to a combination of sales from Tesla's supercomputing line of GPUs, a loyal stable of hardcore gamers buying its GeForce products, and wins from its cloud-based GRID GPU offerings.


In case you're not familiar, NVIDIA GRID affords graphics-hungry users the ability to leverage NVIDIA's world-class GPU acceleration over their networks -- something anyone who's tried to run any graphics-intensive program can appreciate.

Amazon.com recently chose to implement NVIDIA GRID

NVIDIA GRID is a groundbreaking cloud-based graphics solution. Image source: NVIDIA.

Here's where Amazon comes in
On Wednesday afternoon, Amazon.com officially took the wraps off Amazon AppSteam, which it describes as a "low-latency service that lets you stream resource intensive applications and games from the cloud" -- something the company notes is otherwise impossible because of existing "GPU, CPU, memory, or physical storage constraints of local devices."

Sound familiar? It should, because only two days before NVIDIA's earnings conference call, both companies lauded a newly deployed instance of Amazon's Elastic Compute Cloud, which is backed by -- you guessed it -- a NVIDIA GRID GPU instance with 1,536 parallel processing cores.

The AppStream service, then, is a logical extension of Amazon's newly acquired graphics computing power. If you're still having trouble visualizing what Amazon AppStream is all about, here's a freshly released video from the Web giant:

Source: Amazon.com

Of course, while Amazon AppStream could undoubtedly change the way applications are developed for millions upon millions of connected mobile devices, it also serves as arguably the first massive validation of NVIDIA's cloud-based GRID technology.

After all, given all the attention surrounding delays in the commercial rollout of NVIDIA's Tegra 4 processor this year, recent news concerning GRID has been comparatively sparse.

Sure, back in March, NVIDIA not only boasted that Citrix, Microsoft, and VMware were already offering their own respective GRID-powered software, but it also announced its rack-mounted GRID Visual Computing Appliance to target small and medium-sized businesses. Then, in May, GRID grew a bit larger when the folks at Citrix also incorporated it into XenDesktop 7. Finally, less than two weeks ago, GRID even won a place powering the Playcast cloud-gaming service from France's Bouygeus Telecom, which is now being offered to an impressive 1.5 million subscribers.

However, none of those wins carry the same clout as having the formidable, fast-growing Amazon Web Services in NVIDIA's corner. Remember, based on Amazon's most recent earnings results, sales from its Web Services division are on track to hit the $1 billion mark in the fourth quarter alone, which would bring AWS' total 2013 revenue to an estimated $3.2 billion.

Of course, that doesn't all translate to NVIDIA's bottom line. But even if we ignore NVIDIA's significant opportunities in other markets, merely winning Amazon's approval should go a long way toward convincing the world of the viability of its long-term, cloud-based vision.

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The article Amazon Just Validated NVIDIA GRID originally appeared on Fool.com.

Fool contributor Steve Symington owns shares of NVIDIA. The Motley Fool recommends Amazon.com, NVIDIA, and VMware. The Motley Fool owns shares of Amazon.com, Microsoft, and VMware. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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