John Helzer

John Helzer
Contributor since: 2011
Way too early to buy oil and gas stocks in my opinion because of articles like this. Just too many of them. I may be wrong, but this is looking like 1986. All us Texans are shaking in our boots because we have been here personally before. Another 3 to 4 months and then and only then would I recommend buying Oil and Gas Stocks and only if you have a long term horizon. A $3 WTI bounce does not make up for a another $10 to #15 plunge in WTI. Heck yesterday oil wellhead price in North Dakota hit $31.66. LOL
Sold today 2/18/14 at 17.92 for the record.
Bought today 2/7/14 at $15.60 for the record.
Ashraf, another excellent current events article. Nobody writes them better than you and I mean that sincerely.
Having retired from the semiconductor industry, I have to weigh in. The new CEO of Intel worked his way up through manufacturing. There are three common themes all successful manufacturing manufacturing managers have:
1) They hit their numbers or they are gone.
2) They hit the deadwood in management quickly: "Sorry, it's not personal just business".
3) They are very reluctant to lay off the lower level employees. Suspect the bulk of the 5000 Intel employees to be laid off in 2014 will be mid to high level employees who just don't quite measure up anymore.
Note: Intel and a host of other semiconductor firms have an up or out policy when it comes to exempts.
"Oh yes, then they would have to license all the IP that that has been developed over the past decade or so, owned by eg; INTEL, AMD, IBM and many others."
Already done:
" As part of the effort, IBM is following ARM's lead and opening up its proprietary Power-based hardware and software technologies to outside developers for the first time and will offer licenses for parties wishing to use Power IP in their own products, the company said this week.
Joining the alliance at the outset were Google, Nvidia, server manufacturer Tyan, and Israel-based chip design firm Mellanox Technologies. IBM has also extended an invitation for other companies to join the OpenPOWER Consortium."
http://bit.ly/18L2EMm
It implies this. Google has two alternatives to Intel, not just one..i.e. ARM as Bloomberg reported and the other is IBM Power 8 technology which they have had access to since August as a founding member of the consortium.
Clearly something is up, in the server world. I would simply ask yourself why did Google join the IBM Power Consortium as a founding member? In the worst case they are looking for other solutions specific to their needs. In the best case they are looking for a price break from Intel on their server class CPUs.
Hint,
Google is a founding member of IBM's power consortium.
"Big Blue will license its Power processors to other companies, enabling them to build their own servers, networking systems and storage appliances based on IBM's architecture, company officials said Aug. 6."
" When Intel decide to go ahead with the massive marketing campaign to promote their room heater (P4 and Pentium D), I was so mad at Intel. "
We all were. The Pentium 4 was a terrible, terrible processor. I was a pretty big AMD fan back then, although I admit that chipset issues (VIA) made me skeptical of going with the (obviously) superior AMD solutions at the time. I sucked it up and bought the Pentium 4 in many iterations. Northwood was OK, but Prescott and its successors were awful."
Ashraf
I'm really tickled by your comment above and must ask were you 12 or 13 back then.?
P.S. - I'm not an AMD booster or fanboy by any means. But you obviously are an Intel Investor or Intel fanboy.
But perhaps you are just a tech writer looking for clicks. Who knows? More power to you!
I did, And I as many others we're happy that we did not buy into the PR fluff that was presented previously.
Intel dropped 5.35% the next day.
Remember Moore's law assumes that there will be product to fill those expensive fabs with die shrinks that have not turned on yet. It's a first for Intel, but it's happened many times in the semiconductor industry in the past.
P.S. Perhaps Foundry will get Intel out of the jam they are in. But what company in their right mind would sign a contract with them.
We will know in a few short months. In the mean time we have Intel going after bargin bin PCs what a joke!
Intel is running at capacity and doesn't need the foundry business to fill its fabs
Ashraf
Really,
They have two great big fully equiped fabs....one in Arzona and one in Oregon. Set to turn on at unbelievable small process node of 14 nm. But alas they are not running production just yet.
Link to Russ's article: http://seekingalpha.co...
Why? Moore's law assumes that there is demand for the increased supply of ICs. Apparently Intel is looking towards foundry operations to fill this demand. Without it none of the wonderful stuff shown at the Intel Developer Presentation can come to fruition. Bargain bin PC's and free samples for tablet application processors will not cut it.
In the mean time.......We know Nvidia is interested......if the price is right. AMD surely would be too for their game console chips
Shouldn't be all that long for Intel layoffs. It's happened for the last 3 INTEL CEO changeovers.
My two cents Ashraf,
I skim read your articles but love to read the comments posted underneath. Kudus to you for maximizing your clicks. As a tech writer that's what is all about.
Now some serious thoughts. AMD was wise to move away from the PC. Excellent move on the game consoles. Of course Sony and Microsoft took advantage of them and they so now they have that Global Foundries $404 take or pay thing this quarter and $250M next quarter. Puts every thing in jeopardy. But perhaps Intel will start fabing for them to keep their fabs open.
But as you have written Intel is going after the bargain basement PC market. It will be an Epic Fail as AMD surely can attest to.
And as Intel opens their idled fabs to foundry work. See Russ's article....who do you think will sign on? Well so far only Nvidia has said publicly that they would love to talk. Why?...maybe they can get a better deal from Intel and then leverage that with TSMC. It's business not speeds and feeds, flops, and drops or whatever.
Intel's growth in the enterprise is in jeopardy too. Enterprise computing is adopting wholeheartedly virtualized CPU and finally GPU virtualization because of Nvidia. In the latest round IBM, Hitachi, HP, Dell, Fujitsu, ASUS, along with everyone else has adopted Nvidia Grid and are out selling it with Citrus, VmWare, and Microsoft's FX software solutions.
Why should an Intel shareholder be upset with this. It's because most of the virtualization is done with one or two Xeon of the 8 cores with one GPU. An effective reduction in server CPU's by 25%. But a huge increase for Server GPUs where historically there was none! IBM is even re-writing their enterprise software to take advantage of Nvidia Grid using Cuda. Not talking Supercomputing.....just plain old fashion enterprise software. Big, Big Data stuff.
Remember 40% of all PCs sell into large commercial businesses with huge IT support and they like to hit their budgets. Intel currently owns this market. But if this virtualization trend continues all you will need is a monitor or a mobile device and 25%(OK maybe 30%) of Intel server chips in the data center, plus a whole bunch of GPUs.
Note: IBM is pushing Power8 chips big time aligned with Nvidia GPUs.
We live in interesting times....please don't worry about the small inconsequential bargain basement PCs.It's a pimple on Intel's forehead. And AMD is moving away from that business as fast as it can. Just as Nvidia did more than 5 years ago.
"I take the flat guidance with a grain of salt. The low power Haswell is just now coming on line in a big way. I suspect that we will have a pleasant surprise in the form of a slight PC recovery."
Why? Hope and Dreams. I remember reading the same thing about Mainframes during IBM's near death experience in the early 1990's.
Think of it this way. With Cloud computing, public or private. Both CPU and recently with GPUs. What is the need for a high cost Intel chip in a PC when a thin client, IPAD, monitor etc. will run with the full functionality of a PC?
Note: 40% of PC's are sold to commercial businesses. Looks like they are going back to old IT controlled data center.
Love to hear your thoughts on this Russ.
"Not sure if price cuts are a good thing"
Ashraf
780 TI - Thursday
.AMD's new GPUs are quite competitive.
Ashraf
Just like Fermi was same temperature same noise level! History repeats.
Do you remember Fermi - 95 degree C heater---warm yourself in the winter. Washing machine noise from the fan too to keep it at 95 degrees. Well the same thing has just happened to AMD with their new cards. Yes of course after market partners of AMD will mitigate the problem somewhat with better coolers like they did with Nvidia's Fermi, but the damage is done. Just like it was with Nvidia's Fermi. Let's hope AMD goes back to the drawing boards as Nvidia did and come up with new design aka like Nvidia's Kepler that runs cooler and quiet.
In the mean time Nvidia's Kepler GTX 780 TI will be available Thursday. I'm sure you will like the benchmarks.
Sorry to spoil your parade!
Be prepared Thursday morning GTX 780 TI goes on sale at $649 to $699. The benchmarks will justify the price.
It's been done so many times I can't believe people don't expect it! Sell the top cards at lower clock speed and disabled cores. The competition ups the ante, release the card with less disabled cores that you have stored up for this moment and increase the clock speed. Kepler graphics can do this because it runs cool. Noise is not a factor.
The web is buzzing about AMD's heat and noise problem with their new cards. Anandtech even said they can't recommend the cards because of the noise generated by the fan.
Fermi revisited only this time it's AMD.
Nvidia's Tegra 4 chip is finally in a phone - the Xiaomi Mi3. It's sold in China for use on China Mobile (TD version). Every week for the past 4 weeks Xiaomi puts 100,000 units up for sale at their web portal. This weeks batch sold out in 4 minutes and 42 sec.
Note: Xiaomi hired Hugo Barra from Google about 6 weeks ago so they definitely are a serious competitor. And they do outsell Apple in China. Nice looking phone for $327.
link:http://bit.ly/1aCaGwb
"And even there, the competition is present as the likes of Intel would provide a fight to Nvidia's GRID data center initiative"
Amazon just installed Nvidia's Grid in their cloud AWS data Center.
http://yhoo.it/1effx8b
That's a big vote of confidence in the technology
PC..You have to pay to access mobile dram contract pricing. But all the articles posted on SeekingAlpha have quoted the spot DDR3 Dram pricing, at least when it was rising.
Dram Prices Are Falling From Recent Highs:
1) DDR3 2Gb 256Mx8 1333/1600MHz
date HighPrice LowPrice AvgPrice Change
2013/10/14 2.45 2.18 2.29 0.08
2013/10/15 2.45 2.18 2.29 0
2013/10/16 2.45 2.18 2.27 -0.87
2013/10/17 2.45 2.17 2.25 -0.88
2013/10/18 2.45 2.05 2.2 -2.22
2013/10/21 2.4 2.05 2.18 -1.09
2013/10/22 2.35 2.05 2.13 -2.2
2013/10/23 2.35 2.05 2.12 -0.18
2013/10/24 2.23 1.97 2.04 -3.76
2013/10/25 2.15 1.9 1.98 -3.22
DDR3 4Gb 512Mx8 1333/1600MHz
date HighPrice LowPrice AvgPrice Change
2013/10/14 4.45 4.13 4.24 0
2013/10/15 4.5 4.13 4.23 -0.18
2013/10/16 4.45 4.13 4.22 -0.28
2013/10/17 4.45 4.06 4.18 -0.94
2013/10/18 4.45 4.05 4.16 -0.47
2013/10/21 4.45 4.05 4.15 -0.19
2013/10/22 4.45 4 4.11 -0.96
2013/10/23 4.4 4 4.1 -0.24
2013/10/24 4.35 3.96 4.06 -0.92
2013/10/25 4.3 3.85 3.97 -2.21
What is driving this----Added supply from the other big Hynix fab in Koreas and added Supply from Samsung Fabs. Plus the 33% increase in die from Inotera (owned 35.5% by Micron) that Micron bought last quarter. Note: Micron buys Inotera's output on a Market Minus contract with a lag so they have to assemble and test and sell quickly before the price drops. Looks like they are doing just that!
Good thing is Dram contract pricing was up 6% to $1.75 for 2GB in the first half of October.
Hynix reports Oct. 29th - 1st question that will be answered for sure: "What is the production status of the Wuxi Dram plant?
Hold on for a really wild ride up or down. Typical DRAM pricing roller coaster IMHO.
Sometimes Nvidia reminds me of GaAs wafer technology from the 80's and 90's. "GaAs wafers are the future and it always will be."
With that said Nvidia does have value, but when the growth catalysts will come is an open question.
To put things in perspective Nvidia generated $229M in revenue from Notebook GPU's in 3Q 2012...mostly from mainstream uber luxury models and gaming laptops. That segment will probably be down at least 10% this year with further improvements in Intel GPU technology. How much of the $229M is from Gaming laptops vs. mainstream uber luxury laptops would be nice to know.
As you know the high margins come from gaming GPU's. The GPU desktop market split between Nvidia and AMD is currently 66% to 34% in 4Q. Probably shift a few percentage points in AMD's favor as it historically has when this market share percentage split has been reached.
The main thrust at AMD is the X86 semi-custom route with all the console wins which should generate $200M+ revenue per quarter. Margins might not be as good, but mainstream Notebook GPU's are not all that much better.
When a professed long term investor as the author talks about buying or selling weekly options, he/she is usually the seller. I like the other S/A Intel article posted today. More appropriate for longer term investors.
http://bit.ly/YDcg9s
IAEResearch,
Good article, like the focus on dividend growth potential.
Appreciate all opinions Tom,
But with IBM, Csco, Dell, HP, VMWare, and Citrix backing Nvidia's Grid I seriously doubt now would be a good time to short Nvidia. Let's bookmark this article and see. At the time of publishing for this article Nvidia's stock price was $12.47.
Now is not the time to be bullish on Intel. It has a number of headwinds:
1) Goldman Sachs sell price target lowered to 16 from 20. I've learned through other semis to not ignore GS at my own peril.
2) No CEO has been named..uncertainty breeds confusion!
3) Capex is way too high. Too bad it's required to shrink the Atom chip to make it competitive with ARM chips and still comes up short.
4) X86 PC market is shrinking. Moore's law has a corollary. Cost increases equal or greater than the number of transistor increases.
5) The only way Intel can fill their fabs is with:
a) a huge foundry arrangement with Apple at a lower margin.
b) or a stunning smartphone and tablet application processor market share approching 30%..
For reference - Atom chips and chipsets generated $1.6B in 2010 during the hey dey of netbooks. Netbooks sold worldwide were 50M.
I do find it hard to believe that GS thinks Intel will hit $16. That's a 5.6% dividend yield....but perhaps 18 or a 5% dividend yield buy entry point would be sufficient. Dividend hunters have it on their watch lists as I do.
The technicals look ugly, and I expect a correction to the mid-$11 November lows You're right, some short covering action on the way up, but the higher volume one would expect is sorely missing.
71324
Short Interest and Volume has stayed relatively flat during the rise from $11.50. It's like it's off all the trader's radar. By the way Beta is 1.63. I remember when it use to peg over 2. Must be the dividend and the active share buyback plus the largest institutional investment percentage in 2 years. But hey trade it you wish and good luck to you
Settlement Date Short Interest Avg Daily Share Volume Days To Cover
2/15/2013 19,069,121 12,665,422 1.505605
1/31/2013 16,669,716 9,971,878 1.671673
1/15/2013 22,089,865 11,888,628 1.858067
12/31/2012 20,498,284 8,197,794 2.500463
12/14/2012 22,232,030 11,627,484 1.912024
11/30/2012 22,599,925 10,342,385 2.185175
11/15/2012 13,733,949 12,843,361 1.069342
"It is not something to put in one's investment portfolio."
71324
Marty Whitman's of Third Avenue Management thinks it is.
Third Avenue purchased 2.15 million shares of NVIDIA Corp. for $12.43 per share on average, giving the holding a 1.15% weighting in their portfolio
Third Avenue also commented on NVIDIA in its first quarter letter: “Our primary attractions to NVIDIA (NVDA) are its leading market position in graphics processors (GPUs) and, more recently, the strides it has taken to address the growing mobile computing market (tablets and smart phones). Its tablet and smart phone offerings are based on ARM designs for low power applications, enabling us, as investors, to benefit from growth in the adoption of ARM designs, but at much more attractive pricing than buying ARM shares directly. The GPU market is being driven by an increasing demand for graphics due to increasing digital content design (e.g., videos, commercials, 3-D interactive content, product design) and are used heavily in work stations and supercomputers, where high-end computing is used for design and simulation.”
http://bit.ly/10mFngs
So Ashraf,
Is Nvidia Dead money above $12.00 as you have stated before or is it not?
I for one do not believe it is dead money above $12.00 but perhaps you still believe it is?
What say you?
P.S. We are all not day traders.
Ashraf changes his opinion on every stock, based on changes made by the company, to help his readers make better investment decision.
SKS1586
Do you speak for Ashraf?
I say Nvidia is not dead money above $12.00, let's hear from him? soon I hope. We're all not day traders you know?
Ashraf,
Do you still think "Nvidia is dead money above 12" as you said in another article a couple of weeks ago?
For the record I don't, but curious what you think.
"It's easy to win synthetics when you throw lots of cores at the problem. Single threaded performance in more than a simple synthetic benchmark is much more important for most workloads."
Ashraf
I apologize in advance but do you realize how inane you comment sounds? Let's just review the facts:
Microsoft Surface Pro uses an Intel Core I5 part# 3317u. The cheapest model sells for $899 and Does Not Include Microsoft Office. It has to be that price because Intel charges at least $225 for their chip.
Microsoft Win RT with Tegra 3 costs $499 and Includes Microsoft Office.
Now Nvidia and Geekbench say the Intel part#3317u and Tegra 4 are roughly equivalent Intel I5 - 4679, Tegra 4 - 4592. This is a sea change!
Certainly Microsoft will come out with a Tegra 4 Win RT soon. Might cost as much as $504. Only $395 less...than an Intel CPU.
Now if you have to run Legacy apps then an X86 processor is what you want, But the only legacy apps I have run in the last 10 years is Excel and Power Point which are included free on the Surface Win RT.
I also have to ponder the audacity of Nvidia of using benchmarks against Intel. After all Intel was the first to use them with great effectiveness against AMD.
If Intel sells 250 with 60% gross margin, how much you expect Nvidia gross margin to be with 25$ selling price?
Matt-Man
I always thought Intel was overcharging or their costs were out of control or some combination of both but with that said I will give it a shot.
I believe TSMC charges $6500 for a 12 inch wafer now at 28nm. At a die size 80 sq. mm. Using a fab yield of 80% (note: that is a really small die when you think of the fact that Nvidia builds GTX 680 GPUs at a die size of 294 sq. mm or the GTX Titan GPU at 551 sq. mm.) would give you a die cost $9 a piece. Throw in $2 for package and test for a total cost of $11. This would be a gross margin of 56%. Of course they might charge more say $30 tops and raise the gross margin accordingly.