Article Tom's Hardware: AMD Ends 2018 as Top Stock Performer, Nvidia Slides Hard in Q4

UsandThem

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May 4, 2000
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#1
https://www.tomshardware.com/news/amd-best-stock-2018,38308.html

AMD ended the year as the top-performing stock on the S&P 500, up 79.6%
Nvidia stock’s 54-percent drop in the fourth quarter made it the worst-performing company on the S&P 500 over that time period.
During the mining craze Nvidia saw what some people were willing to pay for a GPU, and decided to be greedy when they launched their RTX series. I guess they overestimated how many people were willing to spend $800 - $1200 for a video card. I understand them increasing the price, but IMO they just went too far, too fast.
 
Oct 18, 2013
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#2
I don't think it was really about thinking that they could raise the price and sell the same number of cards. I think its more that the price we see today is them trying to price the new cards so they wont cut into the glut of old 10 series cards that are still out there.

From what I understand, there are still a bunch of 10 series cards that AIBs are trying to get rid of. Those AIBs would not want a new lineup when they have a huge stock of old cards. So, price the new ones super high to get people to buy the old stock, and, if the old stock sells out, you can adjust the price of the new ones down.

I would bet that Nvidia expected mining to go on longer, and, pricing the new cards high was just the best of the worst outcome of that collapse.
 

UsandThem

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#3
There have been several recent articles about the excess 10 series GPUs that Nvidia has, so that is true. They are releasing them in batches to keep the price stable. Although from what I understand, any AIB who wants to sell RTX cards must take shipments of the 10 series.

I still personally believe that most gamers do not want to pay that much for a GPU, or buy a GTX 1060 or 1070ti because they have been out for a while now, and are "old tech". They did get caught with excess inventory after ramping up production when mining popped, but so did AMD. I know they have enjoyed a very healthy profit margin since their 9 series, but IMO they just decided to go too high with the RTX pricing. I mean the top consumer card (ignoring the Titan series) last gen was the GTX 1080ti at $699, and new stock of that card disappeared quickly after the RTX launched, and I think it's sold out at all legit retailers for a while now. Its direct replacement is now $1200.
 

Hitman928

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Apr 15, 2012
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#4
The main reason NV stock price crashed so hard (outside of the whole sector being down and the markets in general being pretty volatile), is that they told investors last year that they were insulated against the effects of a crypto market crash thanks to the record high demand for their gaming cards.

After the crash happened and the market adjusted, NV had to come clean about their excess inventory. This didn't make investors happy who had priced their stock assuming their sales numbers were the new normal. There's actually a class action lawsuit being brought forward by investors over the issue. I don't think they have much of a case, but it's still something NV has to deal with. I think NV and AMD both were well overpriced at their height, crypto market or not, but I also think they are probably a bit under priced right now if they continue to execute well.
 

Dribble

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Aug 9, 2005
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#5
Almost certainly the massive boom in Nvidia's stock was NOT due to crypto - everyone knew that was temporary, certainly not worth the huge stock price increase. You get those increases when investors see something that could make the company 10 times bigger and bet on it. Selling desktop gpu's was never it - there is very little long term growth available there as Nvidia already has most of the market.

The stock boom was almost certainly due to new markets - AI for data centres and self driving cars. That is the only thing that's worth it - if Nvidia cornered those markets then they'd become huge. I suspect the drop is due to Google and Amazon deciding to develop their own chips and not use Nvidia's. i.e. investors bet on Nvidia chips going into every google and amazon server farm but they didn't.
 

Stuka87

Diamond Member
Dec 10, 2010
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#6
Almost certainly the massive boom in Nvidia's stock was NOT due to crypto - everyone knew that was temporary, certainly not worth the huge stock price increase. You get those increases when investors see something that could make the company 10 times bigger and bet on it. Selling desktop gpu's was never it - there is very little long term growth available there as Nvidia already has most of the market.

The stock boom was almost certainly due to new markets - AI for data centres and self driving cars. That is the only thing that's worth it - if Nvidia cornered those markets then they'd become huge. I suspect the drop is due to Google and Amazon deciding to develop their own chips and not use Nvidia's. i.e. investors bet on Nvidia chips going into every google and amazon server farm but they didn't.
nVidia literally said it was because of increased demand for their gaming cards and that the bubble popping would not impact them. Thats why investors were lead to believe that their rise is sales was not part of the crypto currency bubble. Investors are suing nVidia for this very reason.
 
Jan 2, 2019
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#7
Not surprised by AMD's good performance, the company has been creeping up while the fanboys focus on nVidia/Intel. Wouldn't be surprised to see it explode (positively) this year on the next.

79.6% is massive given the market conditions, however.
 

Headfoot

Diamond Member
Feb 28, 2008
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#8
tbh nVidia is an extremely strong company and I think investors just got caught up in a feeding and hype frenzy which got brought back down to earth by hard numbers. unrealistic optimism meets the real world reconciliation
 

psolord

Golden Member
Sep 16, 2009
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#9
Unfortunately, the forum rules do not allow me to clearly express my feelings towards nvidia's pricing.

So I'll just say, good job amd.
 


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