Nvidia: Best In Class Among Semiconductors In 2016
Alex Cho • 16 Comments
Alex Cho • 16 Comments
Nvidia Is A $12 Stock Worth $18: A Sum Of The Parts Analysis
Adam Levine-Weinberg • 65 Comments
Adam Levine-Weinberg • 65 Comments
May 7, 2015, 6:53 PM
- With weak PC sales taking a toll, Nvidia (NASDAQ:NVDA) is guiding for FQ2 revenue of $1.01B (+/- 2%), below a $1.18B consensus.
- The company has also announced it's hiking its quarterly dividend by 15% to $0.0975/share; that spells a 1.8% yield at current levels. The next dividend will be paid on June 12 to shareholders on record as of May 21.
- Product performance: GPU sales fell 12% Q/Q and rose 5% Y/Y in FQ1 to $940M; sales for gaming PCs (+14% Y/Y) remained a strong point, as did Tesla HPC GPU sales (up strongly thanks to demand from cloud service providers). Quadro workstation GPU sales fell. Tesla processor sales fell 29% Q/Q (seasonality) and rose 4% Y/Y thanks to auto infotainment growth and development service growth.
- Financials: FQ1 gross margin (non-GAAP) was 56.9%, +70 bps Q/Q and +180 bps Y/Y, and above a guidance midpoint of 56.2%. That helped EPS beat estimates in spite of a revenue miss, as did cost controls: Operating expenses (non-GAAP) only rose 1% Y/Y to $425M. $53M was spent to buy back 2.4M shares. FQ2 GM guidance is at 56% (+/- 50 bps); operating expenses are expected to be flat Q/Q.
- Nvidia expects to take $100M-$125M in restructuring charges related to the Icera wind-down. Not counting $70M-$90M in litigation spend, operating expenses are expected to be flat Y/Y in FY16 (ends Jan. '16).
- NVDA -1.4% AH to $22.17.
- FQ1 results, PR, CFO commentary (.pdf)
May 7, 2015, 4:23 PM
- Nvidia (NASDAQ:NVDA): Q1 EPS of $0.33 beats by $0.07.
- Revenue of $1.15B (+4.5% Y/Y) misses by $10M.
- Shares -2.4%.
May 6, 2015, 9:06 PM
- AMD has guided (.pdf) at its 2015 analyst day for 2H15 revenue to rise 15% (+/- 3%) from an expected 1H15 level of ~$2B. That implies full-year revenue of ~$4.3B, close to a $4.28B consensus.
- Gross margin is expected to be in a ~32%-34% range in 2H15 after amounting to ~32% in 1H15, and operating expenses are expected to fall to ~$680M-$700M from ~$715M. Free cash flow is expected to be negative in 1H15, and positive in 2H15.
- Long-term targets: 36%-40% GM, over $0.50/year in EPS, double-digit revenue growth from AMD's server CPU, embedded processor, and pro GPU ops, mid-single digit growth from its semi-custom (inc. console APU) and other GPU ops, and flat to down PC CPU revenue. AMD plans to use any cash in excess of $1B to retire debt (it had $906M at the end of Q1).
- AMD has also officially unveiled its 7000 Series notebook CPUs (codenamed Carrizo). The cheapest version has two 1.5GHz. cores, and a 10W max power draw.; the most powerful version had four 2.5GHz. cores, a 12-25W max power draw, and a Radeon R5 GPU. Also announced: A set of new mainstream desktop and notebook GPUs (the Radeon 300 series), and price cuts for A-series desktop CPUs (prices now range from $42-$127).
- In Q2, AMD plans to launch its first GPU to support High Bandwidth Memory (HBM); performance/watt is said to be over 3x greater than current-gen GDDR5 memory. In 2016, it plans to launch GPUs that support HBM and use a FinFET (3D transistor) process; TSMC's 16nm process is a possibility. AMD is counting on the GPUs to reverse share losses to Nvidia (NASDAQ:NVDA).
- Also launching in 2016: Zen, a next-gen CPU core said to handle 40% more instructions per clock cycle and feature a high-bandwidth/low-latency cache system. Samsung/GlobalFoundries' 14nm process is expected to be used; that would narrow Intel's (NASDAQ:INTC) manufacturing process edge, given Intel is currently at 14nm (10nm next year) and AMD at 28nm. Earlier today, SA author Alex Cho took a look at AMD's leaked 2016 Zen CPU roadmap.
- On the ARM (NASDAQ:ARMH) front, AMD is abandoning Project Skybridge, which sought to create "ambidextrous" platforms supporting either x86 or ARM CPUs. The timetable for the company's custom K12 ARM core has been pushed out from 2016 to 2017.
- AMD's analyst day slides
Mar. 12, 2015, 9:17 AM
- Intel (NASDAQ:INTC) now expects Q1 revenue of $12.5B-$13.1B, below prior guidance of $13.2B-$14.2B and a $13.7B consensus. Gross margin guidance remains at 60% (+/- 2%), with lower volumes offset by higher ASPs.
- "All other expectations" have been withdrawn - that presumably includes full-year guidance for mid-single digit revenue growth. Guidance will be updated during Intel's April 14 Q1 report.
- The chip giant blames the warning on "weaker than expected demand for business desktop PCs and lower than expected inventory levels across the PC supply chain." In particular, it thinks "lower than expected Windows XP* refresh in small and medium business and increasingly challenging macroeconomic and currency conditions, particularly in Europe," are taking a toll on sales. Server CPU division sales are "meeting expectations."
- Other PC-exposed names are following Intel lower: Microsoft (NASDAQ:MSFT) -2.4% premarket, AMD -2.8%, Nvidia (NASDAQ:NVDA) -2.5%, HP (NYSE:HPQ) -2.3%, Seagate (NASDAQ:STX) -2.5%, Western Digital (NASDAQ:WDC) -2.7%, Micron (NASDAQ:MU) -3.6%.
- Update (11:35AM ET): While Intel is still down over 4%, Micron and Seagate have turned positive, and HP is close to breakeven. Microsoft, Nvidia, and Western Digital have pared their losses, but remain lower.
Feb. 11, 2015, 6:02 PM
- In addition to beating FQ4 estimates, Nvidia (NASDAQ:NVDA) is guiding for FQ1 revenue of $1.16B (+/- 2%), above a $1.15B consensus at the midpoint.
- FQ4 GPU sales rose 8% Q/Q and 13% Y/Y to $1.07B, aided by a 38% Y/Y increase in sales for gaming PCs (a high-margin business) and continued strength in Tesla (HPC GPU) and Quadro (workstation GPU) demand.
- Tegra sales fell 33% Q/Q and 15% Y/Y, to $112M, with the "the product life cycle of several smartphone and tablet designs" (suggests Tegra wasn't designed into newer products) offsetting auto infotainment growth.
- Gross margin was 56.2%, +70 bps Q/Q and +240 bps Y/Y, and beating a guidance midpoint of 55.5%. FQ1 GM guidance is at 56.2% (+/- 50 bps).
- Operating expenses rose just 3% Y/Y to $420M (compares with 9% revenue growth). 200K shares were repurchased.
- NVDA +4.4% AH to $21.73, making new 52-week highs along the way.
- FQ4 results, PR, CFO commentary (.pdf)
Feb. 11, 2015, 4:22 PM
- Nvidia (NASDAQ:NVDA): FQ4 EPS of $0.43 beats by $0.14.
- Revenue of $1.25B (+9.6% Y/Y) beats by $50M.
- Shares +8%.
Feb. 10, 2015, 5:35 PM
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Nov. 7, 2014, 9:31 AM
- "NVDA reported a strong quarter, continuing to execute on product cycles in Gaming (gaining share vs. AMD), Enterprise (HPC and Cloud), and Automotive & Embedded market verticals," writes Jefferies Mark Lipacis, taking in Nvidia's (NVDA +2.2%) FQ3 beat. However, he reiterates a Hold on a belief the company's "transition to a platform/ecosystem enabler from a component supplier is balanced by decelerating capital return and premium valuation ex-Intel royalties."
- Stifel (Buy) is more bullish, though it admits Nvidia's in-line guidance was below the firm's estimates. "Management reported a doubling of gaming notebook revenue y/y which we view as significant as PC gaming moves from mainly desktops to the higher-volume notebook market ... We remain positive on the NVDA shares as the company's GPU architecture is increasingly used in data centers and supercomputer applications to accelerate computational performance."
- Nvidia's GPU sales rose 13% Y/Y in FQ3 to $991M; growth was just 2% in FQ2. GeForce GPU sales related to gaming PCs rose 36%, and Tesla (HPC) and Quadro (workstation) GPU sales were also strong.
- Tegra sales continued rebounding from a rough 2013, rising 51% Y/Y to $168M. Tegra K1 demand and a near doubling of sales for auto infotainment systems fueled the growth.
- Gross margin was 55.5%, -90 bps Q/Q and -20 bps Y/Y, but in-line with guidance. FQ4 GM guidance is also at 55.5% (+/- 50 bps).
- EPS benefited from the fact opex only rose 2% Y/Y to $415M. $310M worth of buybacks also didn't hurt.
- FQ3 results, PR, CFO commentary (.pdf)
Nov. 6, 2014, 4:25 PM
- Nvidia (NASDAQ:NVDA) FQ3 EPS of $0.31 beats by $0.02.
- Revenue of $1.225B (+16% Y/Y) beats by $25M.
- Expects FQ4 revenue of $1.2B (+/- 2%), in-line with a $1.2B consensus.
- Shares +0.4% AH.
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Aug. 8, 2014, 7:07 PM
- Nvidia (NVDA +8.8%) is "migrating from [being] a consumer-orientated company towards one that focuses on stickier and more profitable markets, such as autos, enterprise/datacenter, and HPC," says Needham's Rajvindra Gill, upgrading shares to Buy following the GPU giant's FQ2 report.
- Stifel's Kevin Cassidy offers a similar thesis, and also predicts PC GPU sales will get a lift from major 2H game launches.
- Morgan Stanley, Deutsche, and others note Nvidia's solid FQ3 guidance comes even though AMD reported a Q2 decline in GPU shipments to graphics card channels, and offered light Q3 guidance - Nvidia sold off in response.
- Of note: AMD blamed the Q2 decline on weaker demand from cryptocurrency miners, a niche it has had more exposure to than Nvidia.
- Nonetheless, MS and Deutsche remain cautious due to valuation. After backing out net cash, Nvidia currently goes for 14.6x FY15E (ends Jan. '15) EPS and 13.2x FY16E EPS.
- Prior Nvidia earnings coverage
Aug. 7, 2014, 4:46 PM
- Nvidia (NASDAQ:NVDA) expects FQ3 revenue of $1.2B (+/- 2%), above a $1.16B consensus. Stabilizing PC sales appear to be providing a lift.
- FQ2 gross margin was 56.4%, +130 bps Q/Q and +10 bps Y/Y, and above guidance of 54%. FQ3 GM is expected to amount to 55.5% (+/- 50 bps).
- GPU sales -2% Q/Q and +2% Y/Y to $878M; they rose 14% in FQ1. GPU sales for gaming PCs (a high-margin business) rose 10% Y/Y, boosted by a recent refresh. Tesla (HPC), Grid (cloud), and Quadro (workstation) GPU sales are also healthy.
- Tegra sales, which fell hard during much of 2013, rose 14% Q/Q and 200% Y/Y to $159M (boosted by the Tegra K1). Automotive Tegra sales were up 74% Y/Y.
- Opex +2% Y/Y to $411M. $500M worth of shares were received through Nvidia's structured buyback agreement.
- FQ2 results, PR, CFO comments (.pdf)
Aug. 7, 2014, 4:24 PM
- Nvidia (NASDAQ:NVDA): Q2 GAAP EPS of $0.22 beats by $0.02.
- Non-GAAP EPS of $0.30.
- Revenue of $1.1B (+12.6% Y/Y) in-line.
- Shares +4.3%.
Jul. 18, 2014, 12:31 PM
- In addition to offering soft Q3 guidance, AMD (AMD -17.5%) stated on its CC (transcript) its expects Q3 to be this year's "peak quarter" for console APU shipments.
- FBR, which has cut shares to Market Perform, calls this "most surprising," given console APU shipments rose sharply in Q4 last year (as the Xbox One/PS4 launched).
- It thinks AMD might benefit down the line from a design win for Nintendo's next-gen 3DS, but only sees this boosting EPS by $0.04. The firm is also concerned inventory rose 10% Q/Q to a new all-time high.
- When pressed in the Q&A about what his console remarks imply for Q4 sales, CEO Rory Read declined to offer a forecast. He did, however, state PC-related sales are expected to rise in Q4 (in-line with normal seasonality).
- BofA/Merrill, which has cut shares to Underperform, argues AMD's PC CPU/GPU ops (have seen share losses to Intel/Nvidia) remain "a material headwind." The firms adds light exposure to enterprise PCs (outperforming in 2014) and certain low-end PC segments seeing strong growth (such as Chromebooks) are also issues.
- Raymond James is still bullish: Though thinking management should've communicated console trends better, it believes AMD continues to execute well, and suspects there's an "element of prudence" to Microsoft/Sony's build activity.
- Nvidia (NVDA -3.9%) is off in sympathy. Read stated on the CC AMD saw a decline in high-end GPU shipments to graphics card channels - Digitimes previously reported something similar - as demand from cryptocurrency miners abated." Shipments are expected to rise in Q3.
Jun. 12, 2014, 4:26 PM
- Citing stronger-than-expected business PC demand, Intel (INTC) now expects Q2 revenue of $13.4B-$14B, better than prior guidance of $12.5B-$13.5B and a $13B consensus.
- Moreover, the chip giant now expects "some revenue growth" for the whole of 2014, after previously guiding for flat sales; the consensus is for 0.7% growth.
- Full-year R&D/MG&A spending guidance has been upped by $300M to $19B-$19.4B.
- The guidance hike follows several quarters of narrowing PC shipment declines, thanks in large part to healthy corporate demand. Windows 7 system purchases tied to Microsoft's decision to end Windows XP support have played a key role.
- Other PC industry names are up in sympathy: MSFT +1% AH. AMD +1.4%. HPQ +0.8%. NVDA +0.7%.
NVIDIA Corp. is a visual computing company, connecting people through computer graphics. It is engaged in creating graphics chips, which is used in personal computers. The company operates through two segments: Graphics Processing Unit (GPU) and Tegra Processor. The GPU segment includes sales of... More
Industry: Semiconductor - Specialized
Country: United States
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