$14.10
0.27 (+1.95%)
NVIDIA Corp (NVDA)
CAPS Rating:
The company deals in world-wide programmable graphics processor technologies. Its major product-line operating segments are: graphics processing units, media and communications processors, handheld and consumer electronics.
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Nvida has several things working against them. Integrated graphics chipsets are becoming more capable of handling graphics intensive tasks. Even gaming is now in reach. AMD/ATI and Intel will own this space.
The price competition in discrete graphics cards is more aggressive than ever and I don't see this easing with integrated graphics taking larger and larger shares of new computer purchases.
With the merger of AMD/ATI, Nvidia and Intel should have become closer than ever. Instead, Intel and Nvidia are at each others throats. I see Intel successfully invading Nvidia's space with integrated graphics, but Nvidia failing in their attempts to invade Intel's space in CPUs.
Nvidia may have some room to grow in the mobile space and super computing, but I see the rest of their business on a slow inevitable decline.
Very good summation of the future prospects for this company. I read in IEEE Computer about a year ago that the novel hardware aspects of GPUs will continue to guarantee this kind of architecture will have a valid purpose in computing and not justify be a complete simulation by current CPUs. However, the eventual integration onto the same die (AMDs fusion processor does this with multiple to make up a single core) will relegate the GPU to the same fate as the math co-processor, physics processor, DSP chip and sound card with respect to personal computing.
On the positive side, NVIDIA could reinvent itself and compete aggressively in new markets as well as some establish ones: i.e. netbooks and smartphones.
I believe that view of the future of video rendering upside down. GPUs are growing at an equal if not faster than rate of speed than CPUs. So...where are the consumers going? They want imaging and they want amazing imaging. CPUs will be ...as they are now ....slaves to the high end of their. You could give me 16 cores but they all top out at the same end, even overclocked. So your top end of any pc,notebook or gaming platform will be your gpu. This may change one day ill concede that but not in the next decade im so sorry.
If you shorted NVDA at 8. 41 .....maybe you should learn more about the industry?
Jules, I assume your post is alluding to the graphics card becoming more of a general floating point accelerator to handle tasks beyond graphics in future PCs? If so, I agree, but that doesn't negate the arguments in my original post. This work will be handled by integrated graphics and < $100 graphics cards. That doesn't help Nvidia. If in your post you are implying that the graphics card will take over other general purpose computing tasks from the CPU you are mistaken. I just don't see much need for $300 discreet graphics cards.
Nvidia's Tegra mobil platform is interesting and may bring in significant revenue next year. And Tesla may help a bit, but I don't see those offsetting the current trend toward integrated and low cost graphics (and the eventual merge of CPU and graphics on the same chip).
How am I wrong?
Well, as a reasonable person I put aside my preconceptions and researched how intel will make a chip with integrated gaming"in reach" and it simply is not in the pipeline. Have you bought a GPU recently? The TV,Gaming, and computing world are about to merge. But what has the industry proven it always lusts for? Display quality. Insanely good display quality. Probably better than the human eye can detect quality fo some weird reason but there it is. Let us not forget integrated chips were abandoned by all computing design that craved a decent rendering. Why? because of heat. Heat will continue to force devices of all kinds to be designed like a car for example. Did the engine ever outpace the transmission? No, instead we have bottlenecks in the world of physics that not the best element of a car or a computer or any other system with sub systems has is limited by. These things are limited by the worst link in the chain. One day the CPU might be able to fill such a large role. But i think it will be the day it replaces RAM slots or monitors. Never.
So here we see in the real market a cpu(intel) and a gpu(NVDA) both thriving in todays market. Looks like the GPU lives to figt another day. O yea and Tegra......Id say 15 is a weak target for this company. But hey if you shorted at 8 are you still at 12?
Jules, you seem to be emotionally invested in this company. That's a bad way to make investment decisions. Yes, I'm still
Try this again...
Jules, you seem to be emotionally invested in this company. That's a bad way to make investment decisions. Yes, I'm still
One more time...
Jules, you seem to be emotionally invested in this company. That's a bad way to make investment decisions. Yes, I'm still underperform on this company, which is not the same as short. I'll remain underperform until my previously stated reasoning no longer holds or my reasoning is shown to be incorrect (it's happened before :). Your replies mostly ignore my reasoning and just address the value of a GPU/floating point accelerator to modern computing - which I agree with.
Nvida is a good company and will likely be successful in the future, but I think they will struggle in the short term.
msrs2k, im sure your intentions are good :) but where to begin!!
Ill start with what i do agree with
1.AMD/ATI merger does mean competition for NVDA, but even though that has put AMD/ATI back in competition....its just that...back in competition, it was loosing horribly over the last couple years or so if you have been following tech you would know this.
2. Price competition has been getting more competitive, but your still talking pretty much the highest margin item in your computer other than software. Also i can agree that integrated circuits are taking larger and larger shares. But i cant fail to mention that both ati/nvda have made pretty big inroads into the integrated circuits, therefore this isnt really a bad thing for them, only cuts into margins some...they still get a piece of the pie.
Now for where i dont agree.
1. Intel has had almost ZERO success invading ANYONES space(other than cpu) graphics wise, instead in recent years both ATI/NVDA have put more and more space in between them and intel as far as the power of there chips, i am talking not just about there dedicated graphics cards.....but ATI/NVDA are pulling away from INTC in the integrated game as well....i do think many years down the road we wont need separate cards for graphics. However i also see no reason to think that ATI/NVDA wont be a major part of that when it happens.
2. NVDA unless i miss my mark, will NOT try to invade INTC territory, as mentioned before...the merger with amd gave ATI new life and NVDA has renewed competition in there own backyard. Consequently they wont make any moves against INTC territory that require them to break new ground at this time.
3. As to your 2nd post, its less of an issue of the graphics card BECOMING more of a general floating point accelerator, than finding more uses for the same item we already have. Adding MORE functionality and making the dedicated card MORE useful.
4. As far as trying to diversify where they already have the skills, NVDA is way ahead of ATI/INTC as far as mobile solutions as well. We also have the netbook, a fad in its current form, and will never take off with a large share of buyers until it includes more functionality....which you just wont get from INTC. Which is where NVDA comes in with there Tegra platform.
5. Lastly...as far as your own stance on NVDA....comon, you went from.
"Nvidia may have some room to grow in the mobile space and super computing, but I see the rest of their business on a slow inevitable decline" in your first post to.
"Nvida is a good company and will likely be successful in the future, but I think they will struggle in the short term"
As for me. i pretty much put my money with the underdog when i spend in tech. So i currently buy ATI/AMD products....cause thats what they are..the underdog( and i like competition)...until i see something other than 1 good release in a row, the market share they gain is temporary, especially being as NVDA keeps responding so effectivly with there own products.
Sace, thanks for the reply. To address your points:
Agree:
1. Of coarse I do know this (and yes, I follow tech. Please lose the snark.). In recent past years NVDA was crushing ATI. But now ATI has better products than NVDA. This will continue to change in either direction, but the easy money due to a weak ATI is in the past.
2. Yep, loss of margin here for both.
Disagree:
1. True, but I wouldn't put my money against Intel developing an IG chipset that is at least competitive with ATI/NVDA. And with Intel's marketing muscle and monopoly power...
2. Agreed.
3. Agreed, but I think advance of IG chipsets will be a more potent force than the increased usefulness of dedicated cards, resulting in a net negative for NVDA. That's really the nut of my reasoning for the underperform on NVDA. I've been wrong before.
4. I don't agree that NVDA is way ahead of ATI in notebooks (perhaps in netbooks, don't know). They do have Tegra which as I said "is interesting and may bring in significant revenue next year", but it is not enough to offset the bleeding of revenue from discreet graphics cards, and I don't expect it to be enough for several years.
5. I don't see any discrepancy in those two statements. NVDA does have room to grow with Tegra and their super computing stuff. But that won't offset the near term hurt. And I do believe NVDA is a good company, but they are in a bad spot with their primary market shrinking in revenue. Once they get through that they will likely grow again with innovative products.
MRS2K,
I'm not emotionally invested as much as just a fan of the technology this company is putting out. It pops for me when i get in it and it hits the targets I put on it so...yea I like it. I am sorry if i didn't address your points in a more organized way but I was just trying to express the conceptual way I see the industry going.You did mention Intel and NVDA not getting closer but in Apple products they could hardly be bundled together more,so it is in most decent rigs made as "PC"s or whatever you like to call the microsoft OS market. If AMD/ATI continues their awful approach/strategy in the sector Intel should be able to raise the capitol to acquire them. If this happens Intel would be a scary force to dominate a very large part of computing.
I understand under perform and I know what a short is, I was merely asking how negative you thought NVDA would perform because your OP suggested to me NVDA was going to suffer at the hands of a disappearing GPU need. In this sector the company branching out and making innovations in new platforms is NVDA with a really dynamic pipeline.
I really do appreciate you previous posting and feedback and I like this forum to discuss NVDA from both angles.
invest in NVDA after the CEO shuts his mouth for a while
I think it is easy and worthwhile to put some money against Intel putting out an single-chip solution that would rival Nvidia/ATI. The low-end integrated graphics is designed to be a minimum baseline for developers, no more. That justifies its low cost and better overall margin. There still exists a lot of applications in the world where that level of graphics support is more than sufficient. This strategy allows them have Nvidia and ATI to pick up the tab for developing and supporting the mid-range options in between.
Fighting for scraps probably isn't the best business plan. And to boot, ATI does have the backing of AMD, which is more than able to fund any short term lulls. Intel doesn't seem too willing to squeeze too hard on AMD (at least enough to kill it) since it has those pesky anti-trust issues.
While I think you might have missed the mark on the above, I still would agree with you on the underperform rating. If there was a third competitor then maybe things would be different. But right now, it's hard to see them doing much to stem that cash bleed.