nVidia's stock taking a massive beating

[Andvari]

It's funny someone should mention 3DFX. I'm guessing about 10 years ago, when my old computer didn't even have a CD-rom in it, I would go to the grocery store with my mom and read magazines. I looked at computer magazines, wishing I could have this or that. I saw an ad for this nVIDIA graphics card. As soon as I saw the ad, I thought to myself "whoa, they're gonna put 3DFX outta business." I had to have been 11 or so at the time, so there was no way I had any actual market knowledge of what either of the companies were worth. It was just a 1 in a million hunch that turned out to be correct.

As for now? I have no hunches, and own an ATI card. I don't think nVIDIA is going anywhere though, and neither is ATI.

 

[ronnn]

Originally posted by: Schadenfroh
Does this mean that my 6800GT is gonna be slower than ATI's equivalent in doom3 now?

yes

 

[DAPUNISHER]

If looking for precedent you won't find it by looking at 3DFX. That was a drastically different situation and has no relevance here. anyone who is familar witht he history of IBM will understand that this isn't any where near sufficent provocation for running around screaming "the sky is falling" where nV's corporate health is concerned.

edit:I realize IBM's situation is vastly different from nV's as well, but my point is that they suffered far more serious financial and orginazational set backs than nV and still survived and prospered.

 

[gururu]

3dfx in a lot of ways were their own undoing. Greed, laziness, complacency.... Nvidia seem to be quite the opposite.. Could be because their CEO is a freakin powermonger.

 

[ronnn]

This is probably just the tip of the iceburg. Soon we will find that their accountants have been cheating..... or maybe much industry will be in trouble soon with rising oil prices and war mongering. Also a new computer that achieves Doom 3 status - is expensive - and may be difficult for many to justify, as the rate of technological advance seems to be slowing and it is increasingly expensive to get noticable gains.

 

[Acanthus]

Originally posted by: Lonyo

Originally posted by: gururu
ATI

Nvidia

nvidia just last year pulled in more than twice what ATI did and with less employees. I doubt they are in any trouble.

On moneycentral.msn.com, latest financial results:
Nvidia: $1.89bn sales
$77mil income
Net profit margin: 7.00%

ATi: $1.83bn
$169.8mil income
Net profit margin 9.3%

ATi has had a serious turnaround recently-ish (last year or 2), and have gone from running a loss to a profit.

Its amazing much R&D costs isnt it

 

[Insomniak]

Originally posted by: Johnbear007
Plenty of people said that about 3DFX

And anyone saying it about Nvidia is a moron. Nvidia could pull out of the graphics market COMPLETELY and still be fine. They do make motherboards, mobile phone chipsets, and other products you know....and recent hints by company brass are that they're going to be diversifying even more very soon.

Stop talking already.

 

[Falloutboy]

Nvidia is fine they make in my opnion the best chipsets (amdside of course) the 6800 series of graphics cards are quite good (they should get some more volume out though) I don't think they are worring about losing the console market this time around they made next to nothing on xbox and Msoft still wanted the chips cheaper, so I"m guess ATI is not making too much on that if anything.

Now why is it that Intel aloud ATI to make chipsets for thier plaform but denied Nvidia? Is it they don't think ATI was a threat to thier chipset buisness?

 

[ShawnD1]

Originally posted by: gururu
ATI

Nvidia

WTF? I think I'm reading those tables incorrectly. Here's what it says for NVIDIA:
Net Profit* 4.1 38.1 99.9 177 90,799 74,419
* in million(s) of US Dollar

74,419 * 1 million = ~ $74 BILLION!?!?

What the hell?

 

[Shad0hawK]

Originally posted by: crsgardner
Personally, I'm a little afraid ATI is going to rule the graphics market soon:

1.) ATI has absolutely killed nVidia in price/performance. The Radeon 9800 was a clear winner and nVidia charged too much for GeForces.
2.) All of the major consoles are going to be using ATI chips next generation.
3.) They had the chance to be the integrated graphics vendor for low-end machines and blew it. Instead, ATI has swept up the low-end graphics market (nearly every Dell we've bought at my company uses an ATI chipset).

Like I said, the 6800 is an excellent card, but it might be too little too late. As much as I think you get more bang for the buck with ATI, I'd hate to see only one major player in the graphics market (competition is always good).

1. =last years news. this year is a new year as the 6800 shows

2. not "all" the "major" consoles will be using ATI

3. intel is the one that "owns" integrated graphics with 31.7%, followed by ATI with 24.9%, then nvidia with 24.7%.

 

[ponyo]

Nvidia has over 650 million in cash and virtually no debt. That's about $4/shr in cash. They're not going anywhere. They're also still profitable.

Stock is trading at 2.5X cash level and company is still in the black. Not bad. At $4/shr it's a no brainer as that would be cash level. We still have to go through August, Sept, and October but it could be good pickup for Santa Claus rally late in the year.

I'm bottom fisher trader so I don't mind market's trash. I plan on buying some Nvidia stock in the next 3 months. I picked up Apple at $14/shr couple years back when it was trading near its cash value of $13.5. Now that was a steal! Basically the market was saying Apple's name, patents, plants, employees, sotware, and anything else was worth zero. Sometimes market is irrational for a short period like that. Nvidia still needs to drop another 60% to reach its cash value but it's not too far from it's book value at its current prices.

Bottomline, Nvidia is financially very healthy and you don't have to worry as long as they have that $650 million in the bank and are still profitable. It would be different story if they had major debt load and were bleeding cash like lot of other tech companies.

 

[nRollo]

Originally posted by: Johnbear007

Originally posted by: JBT

Originally posted by: crsgardner

Does this mean that my 6800GT is gonna be slower than ATI's equivalent in doom3 now?

I hope not. That's what I'm using. :/ Although, I do sometimes worry if nVidia will still be around to support the card in a few years.

lol Nvidia isn't going anywhere...

Plenty of people said that about 3DFX

LOL- who were they? I think we all knew 3dfx was in deep trouble after the illfated Voodoo 3/4/5 saga. nVidia is a diversified firm with little to no debt, huge assets, that is in the position of making less money, but still profitable.

ATI lost millions every quarter for years and is still here.

 

[Shad0hawK]

Originally posted by: Falloutboy
Nvidia is fine they make in my opnion the best chipsets (amdside of course) the 6800 series of graphics cards are quite good (they should get some more volume out though) I don't think they are worring about losing the console market this time around they made next to nothing on xbox and Msoft still wanted the chips cheaper, so I"m guess ATI is not making too much on that if anything.

Now why is it that Intel aloud ATI to make chipsets for thier plaform but denied Nvidia? Is it they don't think ATI was a threat to thier chipset buisness?

yes, because they basically told intel to get screwed when intel tried to pressure them to not make chipsets for amd way back with the orginal nforce.

 

[ponyo]

Originally posted by: Rollo

Originally posted by: Johnbear007

Originally posted by: JBT

Originally posted by: crsgardner

Does this mean that my 6800GT is gonna be slower than ATI's equivalent in doom3 now?

I hope not. That's what I'm using. :/ Although, I do sometimes worry if nVidia will still be around to support the card in a few years.

lol Nvidia isn't going anywhere...

Plenty of people said that about 3DFX

LOL- who were they? I think we all knew 3dfx was in deep trouble after the illfated Voodoo 3/4/5 saga. nVidia is a diversified firm with little to no debt, huge assets, that is in the position of making less money, but still profitable.

ATI lost millions every quarter for years and is still here.

Correct. ATI bled cash for years. Only recently have they turned a profit. How quickly people forget! Even with the current mishaps, the 3 Gorillas of PC world are still Intel, Microsoft, and Nvidia IMO.

 

[Regs]

Little guy on the market floor with a diminutive voice says, "Hey maybe we should sell the next-generation at a reasonable price".

 

[nRollo]

Originally posted by: Regs
Little guy on the market floor with a diminutive voice says, "Hey maybe we should sell the next-generation at a reasonable price".

LOL Supply and demand Regs. When they figure out how to make GDDR3 in quantity, these cards will drop.

 

[Auric]

NVIDIA did well selling low-end discreet graphics when there was no integrated P4 chipset and board makers had little other choice. They got a boost by winning the Xbox contract. These circumstances have now passed and they are without any particular advantage over the competition. Thus said need for diversification. They trail in mobile and could have their chipset lunch eaten at any time. ATI has long been into set-top boxes and PDA's and seems ready to enter chipsets more seriously. Someone mentioned that NVIDIA's audio product relied upon licensing technology which has since been sold and is not likely to be available to them anymore (see Scipher). Where does NVIDIA have to go where they can demand anything more than commodity pricing?

 

[jasonja]

Originally posted by: railer
It's pretty irrelevant how many OEM's buy ATI cards, or whether they're going into video game consoles. ATI makes squat off of those sales. Look at the prices of Dell PC's.....you think they pay ATI (or anybody) that much margin? They don't. ATI (or nvidia) would probably take a loss on sales ot Dell just to use Dell as a marketing tool.

Wrong!... Dell sells millions of PC's and OEM deals are where the money is for both ATI and nVidia. The reason nVidia's margins were down was because they lost the OEM round this season.

 

[Acanthus]

Originally posted by: jasonja

Originally posted by: railer
It's pretty irrelevant how many OEM's buy ATI cards, or whether they're going into video game consoles. ATI makes squat off of those sales. Look at the prices of Dell PC's.....you think they pay ATI (or anybody) that much margin? They don't. ATI (or nvidia) would probably take a loss on sales ot Dell just to use Dell as a marketing tool.

Wrong!... Dell sells millions of PC's and OEM deals are where the money is for both ATI and nVidia. The reason nVidia's margins were down was because they lost the OEM round this season.

Their margains are down from competitive pricing, nothing more.

 

[VirtualLarry]

Originally posted by: JBT

Originally posted by: crsgardner
Although, I do sometimes worry if nVidia will still be around to support the card in a few years.

lol Nvidia isn't going anywhere...

That's what they all said about 3Dfx...

 

[VirtualLarry]

Originally posted by: Naustica
Nvidia has over 650 million in cash and virtually no debt. That's about $4/shr in cash. They're not going anywhere. They're also still profitable.
(...)
Bottomline, Nvidia is financially very healthy and you don't have to worry as long as they have that $650 million in the bank and are still profitable. It would be different story if they had major debt load and were bleeding cash like lot of other tech companies.

Very good point. No debt and cash reserves on hand == financial health enough to weather most near-term storms, I would think. Makes you wonder about the juggernaut that is MS.

 

[Shad0hawK]

Originally posted by: VirtualLarry

Originally posted by: JBT

Originally posted by: crsgardner
Although, I do sometimes worry if nVidia will still be around to support the card in a few years.

lol Nvidia isn't going anywhere...

That's what they all said about 3Dfx...

actually 3dfx missed a product cycle, had heavy debt and went proprietary, nvidia has not done any of that, instead they have: made an outstanding series of cards this cycle, virtually no debt, and are not going proprietary with their chipsets...nvidia's situation now is nothing like 3DFX's situation was.

 

[VirtualLarry]

Originally posted by: Auric
Someone mentioned that NVIDIA's audio product relied upon licensing technology which has since been sold and is not likely to be available to them anymore (see Scipher).

Is that true? I would like to learn more about that, if that is the explaination for NV dropping SoundStorm in their later Socket-A chipsets.

 

[Schadenfroh]

Originally posted by: VirtualLarry

Originally posted by: Auric
Someone mentioned that NVIDIA's audio product relied upon licensing technology which has since been sold and is not likely to be available to them anymore (see Scipher).

Is that true? I would like to learn more about that, if that is the explaination for NV dropping SoundStorm in their later Socket-A chipsets.

doubt it, nvidia i think developed most of it in house, after all, nvidia has the Ex Aureal 3D engineers working for them. The supposed reason that they do not offer a soundstorm card is that the pci bus can not handle real time dolby digital encoding and what not.

 

[Concillian]

I just saw the thread and I'm going to do some multi-reply here

Originally posted by: Lonyo
[On moneycentral.msn.com, latest financial results:
Nvidia: $1.89bn sales
$77mil income
Net profit margin: 7.00%

ATi: $1.83bn
$169.8mil income
Net profit margin 9.3%

1st, the margin is wack in the Nvidia thing... 77/1890 = around 4%, not 7%.

As has been said, NVDA isn't going anywhere, they are healthy compared to 3Dfx. 3Dfx had the enthusiast market and THAT WAS IT. They were really just breaking onto the scene too, they didn't have years of sucess behind them. v1 and v2 were it. They were completely and totally dependent on people who only really care about benchmarks and performance comparisons.

Many of 3Dfx's moves were aimed at trying to break into the OEM market. They KNEW they wouldn't survive in the enthusiast market alone, they needed some of the lower end market that could provide some stability. They didn't succeed in getting much OEM share. As a result, not long after they released one generation that wasn't as competitive, they were hurting BAD.

If nVidia were in the same position, they'd ALREADY be hurting bad after the last generation of GPUs. nVidia clearly went the wrong direction with multiple texture passes per pipeline, but this gen they have clearly recovered.

Originally posted by: Auric
Someone mentioned that NVIDIA's audio product relied upon licensing technology which has since been sold and is not likely to be available to them anymore (see Scipher).

Actually, if you read the stuff at nforcershq.com, they are saying that contacts inside nVidia are pointing at the motherboard manufacturers (nVidias customers) not wanting the product. The reason the customers are not creating enough demand for the product? They do not get scored down by review sites for having just crappy integrated audio. So if the reviewers are not seeing SoundStorm as an advantage, why should they include it in their product?

It's very interesting, and I can see it being true. I mean a few years ago you saw nothing but bitching about how the DIMM slots were too close to the AGP slot, and you had to take out the AGP card to add/remove RAM. And now you see ZERO motherboards with DIMM slots too close to the AGP slot.

The rumored inclusion of SoundStorm2 into the nForce4 chipset has pretty much been debunked and is for sure NOT TRUE, integrated SoundStorm audio is dead, at least for now. There are some rumors that PCI-e may bring about the potential for a standalone card. Apparently the standard PCI bus is not fast enough to do the things that SoundStorm does, and they cannot create a PCI SoudStorm solution, but PCI-e may be possible. However there was speculation about how profitable an enthusiast standalone soundcard can be, especially given Creative's virtual lockdown of OEM customers.

It was also interesting to read how the reason that SoundStorm is generally low quality audio is because the motherboard manufacturers use crappy DACs in conjunction with it, and if you get something with a better DAC externally, SoundStorm could be excellent sound quality AND excellent 3D.

I, for one, was totally bummed at the news that nForce4 would not include SoundStorm. That had been my holdout on going to A64. I want an alternative to Creative, and now there is none unless you stick with an AXP.