Why is Nvidia's stock taking such a thrashing?

[exar333]

Because NVIDIA, like most stocks in the US markets are overpriced.

 

[wlee15]

Everything is a risk. However they were run out of the chipset business years ago. They have replaced that revenue stream with other products.

Intel owns 60+% of the GPU market for a reason. The majority of computers sold through OEMs or best buy already have an IGP. AMDs APU is nothing more than an IGP on the CPU die like Intels SB. This trend to use IGP isnt new. Been happening for years. And Llano is low low end. It loses to a 40 dollar GTS 240 from Nvidia.

The high end provides large profits. I believe those low volume Quadro cards account for about 19% of Nvidia's revenues and even more % for their actual profits.

Nvidia has strong competition in SOCs. It will be interesting to see if they can out launch their competition like they did in the graphics world a decade ago. Basically flood the channel with new and improved products to the point the competition gives up due to lower margins.

There is a huge upside to Nvidia if they can corner the SOC market for cells and Tablets. Kal El imo is the 2nd step in this process.

The top dogs of the mobile world such as Qualcomm, Texas Instruments and Samsung are giants when compared to nVidia and nVidia is going to be able to strut in and just claim the market for themselves. Personally nVidia reminds of ATI and their FireGL/FirePro lineup; plenty of design wins, but they perpetually remain in a small share of the market with a handful of loyal customers.

 

[Imp]

It's the stock market, it doesn't have to make sense. It's a crap shoot.

This and you people do know that the "general" market has been taking a dump since January, right?

More recently, bad job numbers, consumer spending, housing prices, etc. (i.e. supposed economic indicators) are pointing to slow economic growth. Even AAPL is down...

 

[Destiny]

It's because we are in the middle of another big tech bubble and a lot of tech stocks will be dragged down when it pops... i.e. No way Facebook is worth that much... if their net profit and cash flow is like Google's or Apple's then yes I believe... good way to judge if a company is volatile is take a look at their interest payments for loans/liabilities... if their netprofit is not much more than it (interest payments) or less than it that company will be in trouble with just one or two bad quarters...

Stocks will always go up and down... obviously EPS will drop with R&D needs more cash for developing new products, etc...

 

[Knavish]

Everything is a risk. However they were run out of the chipset business years ago. They have replaced that revenue stream with other products.

Intel owns 60+% of the GPU market for a reason. The majority of computers sold through OEMs or best buy already have an IGP. AMDs APU is nothing more than an IGP on the CPU die like Intels SB. This trend to use IGP isnt new. Been happening for years. And Llano is low low end. It loses to a 40 dollar GTS 240 from Nvidia.

The high end provides large profits. I believe those low volume Quadro cards account for about 19% of Nvidia's revenues and even more % for their actual profits.

Nvidia has strong competition in SOCs. It will be interesting to see if they can out launch their competition like they did in the graphics world a decade ago. Basically flood the channel with new and improved products to the point the competition gives up due to lower margins.

There is a huge upside to Nvidia if they can corner the SOC market for cells and Tablets. Kal El imo is the 2nd step in this process.

Yeah I hope that Nvidia can take their GPU technology and convert it into highly competitive SOCs. I guess they're doing a pretty good job at this so far, but it's not like they're way ahead of the competition.

I could see Nvidia's discrete GPU business eventually shifting to be pro-only, like 3DLabs, Evans & Sutherland, etc. of the 1990s. Once that happens, they better have one or two other successful product lines or they will go out of business.

 

[ricleo2]

Several years ago I bought NVDA at 20, it split twice and I sold it for 70.

 

[Genx87]

The top dogs of the mobile world such as Qualcomm, Texas Instruments and Samsung are giants when compared to nVidia and nVidia is going to be able to strut in and just claim the market for themselves. Personally nVidia reminds of ATI and their FireGL/FirePro lineup; plenty of design wins, but they perpetually remain in a small share of the market with a handful of loyal customers.

Nvidia was nothing compared to 3dfx, Matrox, and ATI back in the late 1990s when it came to discrete graphics cards. The business model is different for Nvidia than these companies you mentioned. Nvidia's business model revolves around pushing out new products into the channel to fund R&D on 2 generations down the pipeline. And doing this quite quickly.

Nvidia in their second generation became the hardware platform for android. That is a big deal. A lot of the tablets coming out this year are Tegra 2. And I wont be surprised at all if that changes from Tegra 2 to Tegra 3 in 2012. Phones will also start seeing more Tegra based designs. And while Kal-El is what is going into the wild in the 3rd quater. Nvidia already has 1-2 more generations in research that will be release over the next 24-32ish months I am sure.

It will be interesting to see if they simply out innovate their competition to the point they give up due to lower margins and faster product cycles.

 

[Holler]

anybody wanna trade shares for my riva 128 card? :sneaky:

 

[bryanW1995]

Year-to-year growth Nvidia is up 35% and AMD is down 15%. Just saying.

Yes, but compare the landscape; last year at this time NV had almost nothing in DX11 available (still!) while AMD was dominating that arena. Soon afterwards, however, gtx 460 came out and NV started a nice run that has continued to this day. Heck, they were so bad that BFG went out of business around this time last year.

btw, NV's stock price has very little to do with consumer gpu sales, anyway. I think that their stock price is based on around 1/3 commercial sales, 1/5 cash position, 11% or so consumer gpu sales, with the rest things like tegra/future products. A 20% drop in their stock price in a month has little to do with today's consumer gpu climate.

Nvidia was nothing compared to 3dfx, Matrox, and ATI back in the late 1990s when it came to discrete graphics cards. The business model is different for Nvidia than these companies you mentioned. Nvidia's business model revolves around pushing out new products into the channel to fund R&D on 2 generations down the pipeline. And doing this quite quickly.

Nvidia in their second generation became the hardware platform for android. That is a big deal. A lot of the tablets coming out this year are Tegra 2. And I wont be surprised at all if that changes from Tegra 2 to Tegra 3 in 2012. Phones will also start seeing more Tegra based designs. And while Kal-El is what is going into the wild in the 3rd quater. Nvidia already has 1-2 more generations in research that will be release over the next 24-32ish months I am sure.

It will be interesting to see if they simply out innovate their competition to the point they give up due to lower margins and faster product cycles.

Past success does not always lead to future success, especially in quite dissimilar markets. CAN nvidia succeed in the mobile sector? Absolutely. But the big question of WILL they succeed is much too early to answer. Remember that 3dfx/ati/etc didn't have the deep pockets/engineering resources/etc of NV's competitors in this market.

3dfx had a better marketing dept, however...http://www.youtube.com/watch?v=DmaYH1F6kho and http://www.youtube.com/watch?v=ldiYYJNnQUk

 

[Dark Shroud]

Nvidia was nothing compared to 3dfx, Matrox, and ATI back in the late 1990s when it came to discrete graphics cards. The business model is different for Nvidia than these companies you mentioned. Nvidia's business model revolves around pushing out new products into the channel to fund R&D on 2 generations down the pipeline. And doing this quite quickly.

Nvidia in their second generation became the hardware platform for android. That is a big deal. A lot of the tablets coming out this year are Tegra 2. And I wont be surprised at all if that changes from Tegra 2 to Tegra 3 in 2012. Phones will also start seeing more Tegra based designs. And while Kal-El is what is going into the wild in the 3rd quater. Nvidia already has 1-2 more generations in research that will be release over the next 24-32ish months I am sure..

This is a big market so Nvidia has some room to sell. The problem is the big players already have their own house brands, namely Apple & Samsung. So Nvidia has to convince Samsung to use Tegra over their house brand chips. That's probably not going to happen with the Galaxy Tab.

Then they have to get Toshiba, Dell, & HP on board as well. With these companies Nvidia is going to have to make some lucrative offers to compete with TI, Qualcomm , & Broadcom. All of whom have a cataloge of products with unique features to offer.

Which is why Nvidia had to purchase a company like Icera. Since Qualcomm already make similar products.

It will be interesting to see if they simply out innovate their competition to the point they give up due to lower margins and faster product cycles.

If you mean Nvidia's ARM competition giving up I have to say you're crazy for a few reasons. Tegra 2 was beaten in processing power within a week of it's launch, I believe by Texas Instraments. Qualcomm isn't going to release a more powerful chip, instead they cut power usage by 75%.

Both of these companies have stong reputations, deep pockets, and long standing relationships with hardware manufactures. As oppsed to Nvidia who is known for talking a big game then under delivering.

Lastly by the first half of next year both Intel & AMD will have their own SOCs out to market. Intel is shinking Atom down and AMD will have it's Bobcat based chips out. These will be too big for most cell phones but they will be perfect for tablets. Leting them run Android and multiple flavors of Windows. You can add Meego and probably WebOS into that as well.

 

[OCGuy]

As oppsed to Nvidia who is known for talking a big game then under delivering.

I was following you until I read this....totally unfounded, and it makes you look ignorant.

 

[-Slacker-]

Did that upset you?

 

[badb0y]

Problem is I can't open my Atrix and install a Kal-el quadcore SoC. nVidia is at the mercy of the phone makers (Samsung, Motorola, etc) to adopt there new SoC in the same rigorous manner that nVidia is producing them. It won't matter if nVidia is producing 8 core SoCs if the phone makers are too slow to adopt them.

When nVidia was doing the same thing on the PC market, people could just drop the videocards in themselves but the mobile market is whole different beast.

 

[Dark Shroud]

I was following you until I read this....totally unfounded, and it makes you look ignorant.

Did you some how forget everything that happened with Fermi? I don't even care about the mock ups that weren't real cards. Fermi was months late and over hyped. Not to mention at one of the demos the cards weren't actually fermi cards. Then there are the conctant rebrands, hot running cards, and of course the GTX 590.

It was probably and low blow on my part. But Nvidia can't do that in the mobile world where phones are out dated in 6 months time.

 

[railven]

Did you some how forget everything that happened with Fermi? I don't even care about the mock ups that weren't real cards. Fermi was months late and over hyped. Not to mention at one of the demos the cards weren't actually fermi cards. Then there are the conctant rebrands, hot running cards, and of course the GTX 590.

It was probably and low blow on my part. But Nvidia can't do that in the mobile world where phones are out dated in 6 months time.

Hell, just look at Tegra 1. Nuff said. Tegra 2 still hasn't changed the bad taste Tegra 1 left. The Xoom is already beaten. Woof.

 

[DeathReborn]

If you mean Nvidia's ARM competition giving up I have to say you're crazy for a few reasons. Tegra 2 was beaten in processing power within a week of it's launch, I believe by Texas Instraments. Qualcomm isn't going to release a more powerful chip, instead they cut power usage by 75%.

Both of these companies have stong reputations, deep pockets, and long standing relationships with hardware manufactures. As oppsed to Nvidia who is known for talking a big game then under delivering.

Tegra 2 was launched in Q1 2010. It took at least 2 quarters (over a year in some cases) for Qualcomm, Texas Instruments, Samsung & Apple to get ahead of Tegra 2. Tegra 2 was too early though, it only got real traction in the market nearly a year after it was launched. Had it been launched in Q3/4 of 2010 the extra 6/9 months of development would probably have led to a faster chip but that's something we'll never know. They need to work closer with Phone/Tablet manufacturers to sync Tegra releases with new device launches.

 

[darkswordsman17]

Tegra 2 was launched in Q1 2010. It took at least 2 quarters (over a year in some cases) for Qualcomm, Texas Instruments, Samsung & Apple to get ahead of Tegra 2. Tegra 2 was too early though, it only got real traction in the market nearly a year after it was launched. Had it been launched in Q3/4 of 2010 the extra 6/9 months of development would probably have led to a faster chip but that's something we'll never know. They need to work closer with Phone/Tablet manufacturers to sync Tegra releases with new device launches.

Tegra 2 devices didn't show up until late last year and you couldn't buy much until early this year. In some aspects it never had better performance (GPU, strangely enough) and relied on being on a better manufacturing process and dual core for its advantages, which quickly faded.

 

[Dribble]

The fact that tegra 2 was early was probably why it got chosen by google as their default hardware for android 3. That meant it became the default choice for most companies first go in the tablet market. That's a huge step forward - previously their soc had only really been used by MS in the zune, now it's something used by most big hardware manufacturers.

That building of relationships should make it easier for nvidia to sell them more chips in the future. While nvidia is still a relatively small player, it is no longer an unproven outsider.