Nvidia: Weighing The Up And Down Sides
Esekla • 92 Comments
Esekla • 92 Comments
Nvidia: Best In Class Among Semiconductors In 2016
Alex Cho • 16 Comments
Alex Cho • 16 Comments
Aug. 26, 2015, 4:21 PM
- The Nasdaq has closed its latest ultra-volatile day up 4.2%. Chip stocks, hit hard in recent weeks amid China/inventory concerns, were among the standouts (SOXX +5%) during the rally: Big gainers included Nvidia (NVDA +7.5%), Skyworks (SWKS +6.9%), Qorvo (QRVO +5.9%), Xilinx (XLNX +6.3%), Analog Devices (ADI +7.1%), Linear (LLTC +6.1%), SanDisk (SNDK +7.4%), ON Semi (ON +6.2%), and Cavium (CAVM +5.6%).
- Cybersecurity plays and various other enterprise tech names also did well. Standouts included HP (HPQ +5.5%), Palo Alto Networks (PANW +6%), Rackspace (RAX +9.8%), Red Hat (RHT +5.9%), KEYW (KEYW +8.1%), Brocade (BRCD +5.6%), ShoreTel (SHOR +5.7%), Violin Memory (VMEM +14.7%), and Rapid7 (RPD +7.2%).
- In addition to HP, tech large-caps turning in big gains included Apple (AAPL +5.7%) Microsoft (MSFT +5.5%), Google (GOOG +7.7%), and Intel (INTC +5.5%). Google benefited from a Goldman upgrade.
- KEYW announced a CEO change yesterday afternoon. HP and Brocade are adding to last week's post-earnings gains. Skyworks/Qorvo peer Avago has posted an FQ3 beat after the close.
Aug. 7, 2015, 9:14 AM
Aug. 6, 2015, 5:42 PM
- In addition to beating FQ2 revenue estimates, Nvidia (NASDAQ:NVDA) is guiding for FQ3 revenue of $1.18B (+/- 2%), above a $1.1B consensus.
- Though officially missing consensus by $0.05, FQ2 GAAP EPS would've beaten by $0.16 if not for a $0.19/share charge related to the wind-down of Nvidia's Icera 4G modem unit, and a $0.02 charge related to a Shield tablet recall.
- In spite of a very weak PC market, Nvidia's GPU sales rose 9% Y/Y in FQ2 to $959M, thanks partly to a 51% increase in gaming-related GPU sales. The high-end/high-margin GeForce GTX line was particularly strong.
- PC OEM and Quadro workstation GPU sales fell due to weak end-market demand. Tesla HPC GPU sales also dropped, something Nvidia blames on project timings. Tegra app processor sales fell 19% to $128M, as soft smartphone/tablet-related sales offset automotive growth.
- Financials: EPS received a lift from $400M worth of buybacks. Also: Gross margin was 56.6%, -30 bps Q/Q and +20 bps Y/Y, and above guidance of 55.5%-56.5%; FQ3 GM guidance is at 56.5% (+/- 50 bps). Operating expenses fell 2% Y/Y to $421M. Nvidia ended FQ2 with $4.5B in cash, and $1.4B in long-term debt.
- Shares have jumped to $22.35 in AH trading. Expectations were fairly low going in.
- FQ2 results, PR, CFO commentary (.pdf)
Aug. 6, 2015, 5:36 PM
Aug. 6, 2015, 4:28 PM
- Nvidia (NASDAQ:NVDA): Q2 EPS of $0.05 misses by $0.05.
- Revenue of $1.15B (+4.5% Y/Y) beats by $140M.
- Shares +7.8%.
Jul. 15, 2015, 5:19 PM
- Intel (up 2.4% AH) beat Q2 estimates and provided better-than-expected Q3 and full-year guidance. The chip giant reported a 14% Y/Y drop in PC/mobile CPU division sales, and a 10% increase in server CPU division sales.
- Various names with PC and/or server exposure are following Intel higher. HP (NYSE:HPQ) +1.2% AH. Micron (NASDAQ:MU) +2.2%. AMD +2%. Nvidia (NASDAQ:NVDA) +1.3%. Mellanox (NASDAQ:MLNX) +1%.
- Micron fell 3.7% in regular trading, after having surged yesterday on a WSJ report about a buyout offer from China's Tsinghua Unigroup. John McCain let it be known today he isn't thrilled with the idea of a Chinese company acquiring "the last major American manufacturer of memory chips."
- AMD is 9 days removed from plunging on account of a Q2 warning. The Intel rival's Q2 report arrives tomorrow.
Jun. 26, 2015, 1:28 PM
- AMD is posting steep losses after Micron missed estimates and provided soft guidance; weak PC sales, related DRAM price pressure, and a manufacturing process transition were blamed. GPU archrival Nvidia (NASDAQ:NVDA) is off more moderately, as are Intel and various other PC and/or chip-related names.
- AMD's selloff comes at the end of a week that has seen solid, but not quite glowing, reviews for the company's recently-launched, top-of-the-line, Fury X GPU. Gaming benchmarks generally show the water-cooled Fury X ($649 graphics card MSRP) slightly trailing Nvidia's GTX 980 Ti (also recently launched and priced at $649) in 2K and 1080p tests, but beating it in some 4K tests.
- The 980 Ti is still seen as having an edge in overclocking and power consumption, though the Fury X is deemed much-improved over prior high-end AMD GPUs in the latter area. The consensus: The Fury X won't deliver a knockout blow for AMD, but once more makes it competitive on the (lucrative) high-end. Ars Technica: "It's been a while, but the GPU market just got interesting again."
Jun. 2, 2015, 5:38 PM
May 27, 2015, 1:30 PM
- Nvidia (NASDAQ:NVDA) is "moving beyond its legacy PC and mobile exposure and is well positioned to capitalize on Gaming and Virtual Reality trends, Enterprise GPU virtualization, HPC and Cloud acceleration, and the evolution towards autonomous driving," declares JMP while reiterating an Outperform and $28 target.
- The firm thinks soft PC demand (responsible for Nvidia's light FQ2 guidance) is largely priced in, and notes Nvidia maintains a dominant position and pricing strength in the high-end gaming GPU market - AMD is hoping to challenge Nvidia's dominance with the pending launch of GPUs supporting High Bandwidth Memory. It also speculates Nvidia could contribute to Apple's rumored car efforts, much as it has landed Tegra design wins with Tesla.
- Also: With the chip industry continuing to consolidate, JMP argues Nvidia is "an under-appreciated M&A target, particularly in the context of the broad range of OEM suitors that could use its IP across new media, next-gen gaming, robotics, and autonomous driving markets."
- Previously: Analysts battle over PCs, growth markets following Nvidia's FQ1 report
May 8, 2015, 7:30 PM
- Initially down just modestly after posting mixed FQ1 results, issuing weak FQ2 guidance, and upping its capital returns, Nvidia (NASDAQ:NVDA) sold off today to its lowest levels since early February. Roth downgraded to Neutral, and Stifel and Wedbush cut their targets. JMP went contrarian and hiked its target by $1 to $28.
- "[W]e underappreciated the company’s exposure to PC OEM weakness," writes MKM's Ian Ing (Neutral). He also thinks Nvidia's gaming GPU business (an FQ1 strong point) could once more have "reasonable competition" thanks to the pending launch of AMD's R9 300 GPU series (will be the first GPUs to support High Bandwidth Memory), at least until Nvidia's Pascal GPUs launch in 2016.
- Raymond James Hans Mosesmann (Strong Buy) argues Nvidia's non-PC ops remain healthy. "Management was unambiguous regarding continued strength in Gaming, Tesla (datacenter acceleration seeing >50% y/y growth), and Auto." He also considers a seasonal 2H15 sales rebound plausible, given the Windows 10 launch, 4K display growth, and virtual reality product launches.
- On the CC (transcript), CFO Colette Kress stated gaming GPU revenue rose 25% Y/Y in FQ1 to $587M, HPC/cloud revenue 57% to $79M, and auto revenue 121% to $77M. On the other hand, OEM/IP revenue fell 38% to $218M, thanks to both PC OEM weakness and the end of life for Tegra mobile design wins. She added a weak euro pressured Nvidia's European sales.
- In addition to upping its dividend, Nvidia has added $1.62B to its buyback authorization, bringing its total size to $2B. The company now plans to return $800M to shareholders in FY16 (ends Jan. '16), up from a prior $600M.
May 8, 2015, 9:16 AM| May 8, 2015, 9:16 AM | 4 Comments
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. 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. 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. 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)
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 and Tegra Processor. The Graphics Processing Unit segment... More
Industry: Semiconductor - Specialized
Country: United States