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
Apr. 14, 2015, 7:15 PM
- Goldman Sachs offers three criteria on how to pick stocks to short: Look for individual stocks with high valuations that have a tendency to underperform; take hints from mutual funds as they do a good job of selecting shorts; and look for stocks that are likely to move on company-specific factors and are less prone to moving with general market and sector trends.
- Among the overvalued stocks Goldman thinks could drop are CELG, ORLY and RHT; stocks underweight by mutual funds that could fall are HST, CTL and EQR; and likely to deviate from the broad market and their sectors are KLAC, JEC and COH.
- Rounding out Goldman's 19 stock recommendations that could reward short sellers: ARG, DO, DISCA, FLS, KSS, MOS, NDAQ, NVDA, TDC, WU.
Apr. 9, 2015, 6:03 PM
- As Intel's (NASDAQ:INTC) March 12 warning led many to expect, PC sales were weak in Q1: IDC estimates shipments fell 6.7% Y/Y to 68.5M, a much sharper drop than Q4's 2.4% and Q3/Q2's 1.7%. Gartner estimates shipments fell 5.2% to 71.7M. With IDC also reporting of price pressure, revenue declines might be larger.
- IDC: [T]he Q1 market faced multiple headwinds – including inventory build-up of Windows Bing based notebooks, commercial slow down following the [Windows] XP refresh and constrained demand in many regions due to currency fluctuations and unfavorable economic indicators." Gartner thinks sales of "mobile PCs" (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply. "PC replacements will be driven by thin and light notebooks with tablet functionality."
- Both Gartner and IDC report U.S. PC shipments fell only ~1% Y/Y. On the other hand, IDC thinks Japan (another high-ASP market) saw shipments fall 44%; strong Q1 2014 spending prior to a tax hike made for tough comps.
- Market leaders Lenovo (OTCPK:LNVGY) and HP (NYSE:HPQ) continued taking share from firms with less scale: IDC estimates Lenovo's share rose to 19.6% from 17.6% a year ago (3.4% unit growth), and HP's to 19% from 17.1% (3.3% unit growth).
- #3 Dell's share rose to 13.5% from 13.4%; #4 Asus (OTC:ASUUY) was flat at 7.1%, and #5 Acer (OTC:ASIYF) rose to 7% from 6.3%. Everyone else collectively fell to 33.9% from 38.4%.
- Unlike in Q4 and Q3 (seasonally stronger quarters for the company), Apple (NASDAQ:AAPL) wasn't in the global top-5. IDC estimates the company's US. unit share rose to 10.9% from 10.6%, good for fourth place (revenue share is higher).
- Other PC industry names: MSFT, AMD, NVDA, MU, STX, WDC, HTCH
Apr. 6, 2015, 12:08 PM
- In a Markman hearing for Nvidia's (NVDA +1.1%) ITC infringement suit against Qualcomm (NASDAQ:QCOM) and Samsung, administrative law judge (ALJ) Thomas Pender has ruled "claim constructions favorable to NVIDIA will be applied to six out of seven disputed claims," Nvidia asserts.
- Pender will rely on the claim constructions to rule on Nvidia's infringement claims. The ITC commission typically provides a final decision a few months after an ALJ's ruling.
- Last year, Nvidia sued Qualcomm and Samsung for allegedly infringing "GPU patents covering technology including programmable shading, unified shaders and multithreaded parallel processing," via their Snapdragon and Exynos app processors; Samsung has filed countersuits. Nvidia competes against Qualcomm and (indirectly) Samsung via its Tegra processor line.
Apr. 1, 2015, 3:30 PM
- Actavis (ACT -1%) should outperform following its purchase of Allergan, and FDA action dates for eluxadoline and cariprazine could also be catalysts.
- Though Occidental Petroleum is the team's top pick in energy, Anadarko (APC +1.1%) is the best short-term play on a recovery in oil prices.
- Strong fundamentals and easy year-over-year comps make AvalonBay (AVB -0.9%) a pick in apartment rentals.
- A favorable Supreme Court ruling in King vs. Burwell by the end of June provides plenty of upside possibility with little downside for HCA Holdings (HCA -0.8%).
- Also on the buy list are Ingersoll-Rand (IR -1.5%), Nvidia (NVDA +0.2%), UTX (UTX -1.1%), and Disney (DIS +0.4%).
- Making the underperform list is the Gap (GPS -2.2%) thanks to less room for cost cutting and a forecast for continued weakness in sales. Also a Q2 sell: Tesla (TSLA -1%) " lacks any real technological advantage over its competitors" says the team, seeing a significant Q1 loss, an increase in the already-high cash burn, and a questionable delivery outlook.
- Source: Benzinga
Mar. 25, 2015, 12:03 PM
- Chip stocks are particularly hard-hit (SOXX -3.6%) on a rough day for tech. The Nasdaq is down 1.3%, and the S&P 0.7%. Going into today, good earnings reports and ongoing M&A activity had led the Philadelphia Semi Index to rise 10% from its Jan. 30 close; the index remains up nearly 2x from its fall 2012 lows.
- AMD (AMD -7.2%) is a major decliner following a UBS downgrade. AMD rival/GPU giant Nvidia (NVDA -5.2%) and memory giant Micron (MU -3.7%) are also selling off, as are merger partners NXP (NXPI -3.8%) and Freescale (FSL -3.4%), RF chipmakers Avago (AVGO -5.2%), Skyworks (SWKS -5.3%), and Qorvo (QRVO -7.1%), LED/RF chipmaker Cree (CREE -4.1%), and high-flying video processor developer Ambarella (AMBA -4.3%).
- Other decliners include telecom chipmakers/ARM server CPU vendors Cavium (CAVM -4.8%) and AppliedMicro (AMCC -4.4%), microcontroller vendors Atmel (ATML -3.5%), Cypress (CY -5.5%), and STMicroelectronics (STM -3.5%), voice processor developer Audience (ADNC -3.7%), analog/mixed-signal chipmakers Linear (LLTC -3.7%), Maxim (MXIM -3%), and Intersil (ISIL -3.5%), FPGA maker Lattice (LSCC -3.9%), and mixed-signal/wireless charging IC developer IDT (IDTI -5.4%).
- Chip equipment, IP, and foundry providers are also underperforming. Big decliners include ARM (ARMH -4.4%), KLA-Tencor (KLAC -4.2%), Lam Research (LRCX -5.4%), ASML (ASML -4.1%), TowerJazz (TSEM -4.3%), Mattson (MTSN -4.5%), Ultratech (UTEK -4.7%), and Tessera (TSRA -6.1%). ASML has been downgraded to Hold by Banco Santander.
- TSMC (TSM -4.6%) is among the decliners in spite of a Digitimes report stating the foundry giant's sales are expected to rise 0%-5% Q/Q in Q2 - consensus is for a 2% drop - with strong Apple A8 CPU orders offsetting soft Qualcomm Snapdragon 810 orders.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Mar. 24, 2015, 3:54 PM
- Buyback-happy U.S. firms are prohibited from repurchasing shares from about five weeks prior to releasing quarterly earnings to about 48 hours after those reports. These blackout periods, says Goldman, may offer an especially tasty time for investors to pick up shares of their favorites.
- "High valuations in the absence of corporate demand may weigh on stock prices," says Goldman's Amanda Sneider, and particular areas of focus are tech, consumer discretionary, and financials - they've accounted for more than 50% of buyback activity.
- Goldman's buyback blackout theme buys: SanDisk (NASDAQ:SNDK), Yahoo (NASDAQ:YHOO), Travelers (NYSE:TRV), Apple (NASDAQ:AAPL), Juniper Networks (NYSE:JNPR), Xerox (NYSE:XRX), Torchmark (NYSE:TMK), F5 Networks (NASDAQ:FFIV), Citrix Systems (NASDAQ:CTXS), Aon (NYSE:AON), Moody's (NYSE:MCO), VeriSign (NASDAQ:VRSN), Hartford Financial (NYSE:HIG), Ameriprise (NYSE:AMP), Corning (NYSE:GLW), Time Warner (NYSE:TWX), Seagate Technology (NASDAQ:STX), Viacom (NASDAQ:VIAB), Legg Mason (NYSE:LM), XL Group (NYSE:XL), DirecTV (NASDAQ:DTV), Allstate (NYSE:ALL), Nvidia (NASDAQ:NVDA), CBS (NYSE:CBS), Macy's (NYSE:M), Kohl's (NYSE:KSS).
Mar. 23, 2015, 9:26 AM
- Citing concerns about the expiration of Nvidia's (NASDAQ:NVDA) licensing deal with Intel (set for March 2017), Goldman's James Covello has downgraded the GPU giant to Sell, and cut his target to $20.
- Covello: "Our SanDisk, Qualcomm and pharma case studies suggest stocks see 15%-60% multiple compression going into binary events where licensing/patents are in jeopardy. We believe the near-term catalyst to refocus investor attention on longer-term normalized EPS will be weakness in PC fundamentals (which Nvidia noted it is not seeing at its analyst day)."
- He estimates the PC industry still accounts for 55% of Nvidia's op. profit. The automotive and data center/HPC markets are estimated to make up less than 10%, and declared to be getting more competitive.
- BofA/Merrill recently defended Nvidia against Intel licensing fears, arguing Nvidia's core products have $2/share in earnings power and that just "a partial resumption" of Intel royalties following the current deal's expiration could boost his estimates.
- Shares have fallen to $22.80 premarket.
Mar. 17, 2015, 6:16 PM
- Nvidia's (NASDAQ:NVDA) new Titan X flagship GPU, unveiled at the company's GPU Technology Conference, contains a whopping 12GB of GDDR5 video RAM - twice that of the prior-gen Titan/Titan Black. The number of CUDA GPU cores has been increased to 3,072 from the Titan Black's 2,880, and the core and boost clock speeds respectively hiked to 1GHz. and 1.075GHz. from 889MHz. and 980MHz.
- Not surprisingly, the Titan X is based on Nviida's Maxwell GPU architecture - Titan/Titan Black are based on the older Kepler architecture. Like its predecessors, it's priced at a steep $999, and aimed at a gaming enthusiast market that has been very good to Nvidia lately; GPU sales for gaming PCs rose 38% Y/Y in FQ4.
- Benchmarks show the Titan X soundly outperforming existing Nvidia and AMD GPUs; only dual-GPU setups manage to beat it. AnandTech: "[T]he competitive landscape right now will greatly favor NVIDIA. With AMD’s high-end having last been refreshed in 2013 and with the GM204 GTX 980 already ahead of the Radeon 290X, GTX Titan X further builds on NVIDIA’s lead."
- Nvidia has also launched Drive PX, a $10K self-driving car development platform featuring two Tegra X1 processors said to be powerful enough to "weave together data streaming in from 12 camera inputs and enable a wide range of advanced driver assistance features to run simultaneously." Elon Musk appeared on stage to praise Nvidia's efforts; the infotainment system within Tesla's Model S runs on a Tegra.
- Also: 1) Nvidia has launched Digits DevBox, a small $15K supercomputer sporting 4 Titan X GPUs and aimed at deep learning/A.I. researchers; Nvidia asserts Titan X was optimized for neural networking tasks. 2) More details have been shared about the next-gen Pascal GPU architecture (arrives next year, first detailed a year ago). It supports up to 32GB of memory, and is said to deliver much-improved floating point performance through the use of technique known as mixed-precision computing.
- Nvidia rose 1.2% today to $23.25, leaving it just $0.05 away from its 52-week high.
Mar. 13, 2015, 3:21 AM
- In the latest sign of weakening demand for personal computers, International Data Corp. predicts global shipments of PCs will decline 4.9% this year to 293.1M units, a bigger drop than its previous guidance for a 3.3% decrease.
- According to market research firm, the PC market declined 0.8% to $201B last year and is expected to drop an additional 6.9% in 2015, with smaller declines in coming years, reducing the market to $175B by 2019.
- Previously: Intel -4.1% on Q1 warning; other PC industry names also fall (Mar. 12 2015)
- Related stocks: OTC:ASIYF, AMD, HPQ, INTC, OTCPK:LNVGY, MSFT, MU, NVDA, SNE, STX, OTCPK:TOSYY, WDC
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.
Mar. 10, 2015, 11:04 AM
- Declaring the company has gone through an "underappreciated transformation from a legacy PC graphics vendor into a high-end supplier into gaming, enterprise graphics, accelerated computing, and automotive markets," BofA/Merrill's Vivek Arya has upgraded Nvidia (NVDA +1.9%) to Buy, and set a $28 target.
- Arya respectively forecasts pro forma FY16 (ends Jan. '16) and FY17 EPS of $1.50 and $1.71, respectively $0.06 and $0.17 above consensus. He thinks archrival AMD (30% GPU share) will be hamstrung by its financial challenges, and states even "a partial resumption" of Intel royalties following the March 2017 expiration of Nvidia's current Intel licensing deal (responsible for 21% of EPS) could drive upside to his estimates.
- Arya sees $2/share in earnings power for Nvidia's core products. Potential royalty revenue streams are viewed as a free call option for investors - with Nvidia owning 7K graphics patents and currently battling Samsung and Qualcomm in the courts, the company could ultimately strike lucrative deals with licensees not named Intel.
- Shares have rallied to their highest levels since early 2011. Today's gains come in spite of a 1.3% drop for the Nasdaq. Arya upgraded Nvidia to Neutral in December.
Mar. 7, 2015, 2:17 PM
- Google (NASDAQ:GOOG) has "assembled a team of engineers to build a version of the Android operating system to power virtual-reality applications," two sources tell the WSJ. "Tens of engineers" are said to be working on the project, which was launched in the wake of Facebook's (NASDAQ:FB) $2B 2014 acquisition of early VR hardware/software leader Oculus.
- The report comes as industry investments in VR platforms accelerate rapidly. In addition to Facebook/Oculus, Sony, HTC, and multiple startups have projects in various stages of development. Sony just promised its gaming-focused Morpheus VR headset would launch in 1H16; HTC showed off its Vive headset at the Mobile World Congress.
- Last year, Google launched Cardboard, a cheap prototype kit meant to get developers to start writing VR apps for Android. Oculus, meanwhile, has partnered with Samsung to launch the Gear VR, a headset line that relies on Samsung (Android) phones to provide the device's display and camera; a full commercial launch is expected later this year. Oculus has also bought multiple startups to help maintain its tech lead.
- "Virtual reality is bigger than gaming," Oculus CTO John Carmack proclaimed at this week's Game Developers Conference (GDC). Mark Zuckerberg at the time of the Oculus deal announcement: "Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles ... Imagine sharing not just moments with your friends online, but entire experiences and adventures.'
- GPU leaders Nvidia (NASDAQ:NVDA) and AMD are also going after the opportunity: Nvidia used GDC to show off several VR game demos powered by its GPUs; its Maxwell GPU line has already been optimized for VR. AMD used GDC to launch LiquidVR, a VR developer SDK for its GPUs that improves head-tracking and reduces latency/stuttering, and by doing so aims to eliminate motion sickness (still a common user complaint).
Mar. 4, 2015, 12:17 PM
- Two years after launching its Shield Android handheld console, and a year after launching a Shield tablet, Nvidia (NVDA +0.9%) has launched a $199 set-top under the Shield name that ships with a controller and runs on Google's recently-launched Android TV platform.
- Not surprisingly, the Shield set-top is powered by Nvidia's new Tegra X1 processor (contains a powerful Maxwell GPU) - that's a big reason Nvidia calls the device "the world's first Android TV console." 50+ Android titles will be optimized for Shield, including Crysis 3 and Doom 3, and 4K video is supported.
- Also unveiled: A 1080p game-streaming service enabled by Nvidia's Grid server GPU platform. The service will have free and premium subscription tiers (no word on pricing yet) to go with individual game sales, and launch in May. Naturally, the Shield set-top will support the service, which arrives shortly after Sony launched its PlayStation Now gaming service.
- The set-top is more costly than Apple TV ($99), Amazon's Fire TV ($99), and Roku's hardware ($50-$100). But its gaming capabilities are also far superior. One unanswered question is how receptive the gamers whom the set-top targets will be to buying the device instead of a PlayStation 4 ($400) or Xbox One ($350-$450).
- Update: Nvidia has followed up by sharing a few details about the Titan X, its next-gen flagship GPU. Titan X will had over 8B transistors (up from the Titan's 7B) and 12GB of video RAM.
Feb. 12, 2015, 9:15 AM| Feb. 12, 2015, 9:15 AM | 5 Comments
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%.
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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