NVIDIA's stock on track to suffer biggest one-day loss in 5 1/2 years

[Qwertilot]

Or of course that teeny, tiny, new market opening at frankly scary speed in terms of compute for deep learning etc.

 

[HurleyBird]

That will help, for sure, but I doubt that market will be bigger than automotive in the future, or that it will ever be more than a small fraction of gaming.

 

[antihelten]

How do you think they're able to post record quarter after record quarter? It's because their singular competitor hasn't been competitive. Their high stock price is predicated on AMD remaining noncompetitive, or on the automotive side of the company growing to the point where it can pick up the slack if/when they have strong competition again in their primary market.

The fact that Nvidia has been able to post record quarters requires more than just a lack of competition. Take Intel for instance, they are in pretty much the same position as nvidia competition wise and yet they haven't been able to post result even close to what Nvidia is doing (growth wise), so clearly this is not simple a result of a lack of competition.

That would be a good reason, but the fall in stock price seems directly related to the downgrade, and the reason for the downgrade is: "We believe consensus is underappreciating a slowdown in gaming and the potential negative impact to the multiple.

If you look at Nvidia's historical P/E ratio, you can see that the correction has actually been underway for some time now (since december 2016), so clearly that can't be a result of the downgrade that was announced last thursday, also the stock has been going down since the beginning of february, so again clearly not directly linked to the downgrade that came later. The large 10% drop would likely have been a direct overreaction to the downgrade (overreaction since the stock rebounded by 5% later on), but it is part of a longer trend that started before the downgrade. As such the reasoning given would actually seem to be apt, and notably the reasoning has nothing to do with competition from AMD.

So all in all the stock became overvalued because investors overestimated the health of the gaming market and the speed with which Nvidia would be able to transition away from it to deep learning and automotive (and thus overestimated Nvidia's future growth potential), not because investors underestimated competition.

 

[Shmee]

Moved to general video card forum since everyone wants to bring AMD into this...

 

[Baron Fel]

Yeah, really tough times for Nvidia with the stock price about 3x higher than it was this time last year.

 

[sm625]

NVDA lost 90% in 2002. The run up over the last year is at least in part to them being able to sell overpriced 1080s and 1070s into zero competition. Surely the market is not going to be pricing that same level of un-competition this year.

 

[zinfamous]

NVDA lost 90% in 2002. The run up over the last year is at least in part to them being able to sell overpriced 1080s and 1070s into zero competition. Surely the market is not going to be pricing that same level of un-competition this year.

probably. There will be far more competition for NVDA, but the 1080ti release and pricing with the reduced pricing of the other Pascal cards right now gives them a significant, current advantage over AMD when it comes to GPU...but that is just half of what AMD has going for them.

In that same time, AMD is up 600% compared to nVidia's 300% I mean....are we really debating the better buy, here, especially considering the pps for AMD?

AMD will live and die by RyZen and Naples this year, not so much with Vega and Polaris refresh; but even a modest gain in market, I'm thinking 5%+ from last year's 20% gain, over nVidia's current share will probably be seen as a success for AMD overall. That's just one sector for them, and considering that they are locked in with Google and other vendors for GPU, I think that's a conservative projection.

 

[tential]

Moved to general video card forum since everyone wants to bring AMD into this...

Are you suggesting Nvidia stock price has no relation to anything amd does?

 

[DaveSimmons]

Stock price and company health are two different things.

If buyers pump a stock price up until it's overvalued, a correction is a normal, healthy reaction not a victory for Team Red or a sign of DOOOM!


(Also, most people should not be buying individual stocks at all. Buying and holding low expense ratio stock index mutual funds and ETFs is a much safer long-term investment. Team Vanguard!)

 

[zinfamous]

Are you suggesting Nvidia stock price has no relation to anything amd does?

pretty hard and fast rules that if the thread is in the specific company forums, then the discussion is to stick to that company. If you want to talk about both, it needs to be in the general forum. I think it's pretty simple and easy to follow. OK, well it should be.