Wed, Feb. 11, 4:22 PM
Mon, Feb. 2, 2:17 PM
- AMD is making "real progress" in its efforts to offset declining PC CPU/GPU sales by growing sales of embedded/custom processors, declares Barron's in a positive weekend piece.
- The paper also highlights new CEO Lisa Su's cost-cutting efforts, and quotes Ascendiant Capital's Cody Acree as arguing AMD is winning back significant GPU share from Nvidia (NVDA +1.1%). Acree adds AMD has grabbed enterprise PC design win share that hasn't yet translated into revenue.
- Jon Peddie Research estimates AMD's PC GPU share fell 5.8% Y/Y in Q3 to 14.1%, and that Nvidia's share fell 1.6% to 14.1%. Intel's (NASDAQ:INTC) share is estimated to have risen 7.5% to 71.8%, thanks to rising sales of CPUs with integrated GPUs.
- Barron's does caution AMD's long-term debt load ($2.2B) now exceeds its market cap. But it also points out most of the debt doesn't mature before 2019, and that the company has $1B+ in cash/equivalents and a $400M credit facility to help pay its bills in the near-term.
Tue, Jan. 27, 12:35 PM
- Micron (MU -3.6%), Nvidia (NVDA -3.4%), Seagate (STX -3.7%), and Western Digital (WDC -3.4%) have joined Intel and HP among the ranks of PC-exposed names off sharply in response to Microsoft's results and guidance. The Nasdaq is down 1.5%.
- The 13% Y/Y drops reported by Microsoft for Windows OEM Pro and non-Pro license revenue are getting a lot of attention, as is the fact Microsoft partly blamed the former on slowing business PC demand (also reported by IDC).
- Microsoft also stated non-Pro revenue was hurt by a mix shift towards cheaper PCs (typically feature cheaper processors, integrated GPUs, less DRAM, and smaller hard drives) for which Windows license fees are lower.
- Seagate and Western both tumbled yesterday due to the former's soft calendar Q1 guidance. Western reports after the close.
Thu, Jan. 8, 4:18 PM
- Hit hard on Tuesday amid a market rout, chip stocks have more than made up for it today: The Philadelphia Semi Index (SOXX +3%) handily exceeded the Nasdaq's 1.8% gain. The index posted a 1% gain yesterday.
- Micron (MU +4.9%) has been one of the standouts, more than recouping yesterday's post-earnings losses. Ditto Freescale (FSL +9.2%), which benefited from a Deutsche target hike, and Marvell, which got a lift from an MKM note. Others: NVDA +3.8%. NXPI +4.7%. AVGO +5%. SWKS +4.5%. CY +6.1%. CODE +5.9%. CAVM +5.2%. SWKS +4.5%. SLAB +4.5%. KLIC +3.8%. SMTC +3.6%. ATML +3.7%. FCS +4.2%. TSEM +4.2%.
- As is their custom, both chipmakers and their clients have been unveiling plenty of new products at CES.
- ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Nov. 14, 2014, 11:34 AM
- The Department of Energy has awarded $325M in contracts to IBM (IBM +0.6%) to create two GPU-accelerated supercomputers declared to be at least 3x more powerful than any existing system.
- The systems will rely on IBM's Power CPUs, Nvidia's (NVDA +0.5%) Tesla GPUs and NVlink GPU interconnects, and Mellanox's (MLNX +2.1%) 100Gb/s InfiniBand interconnects. Installation is expected in 2017.
- IBM asserts the systems will lower energy consumption by limiting data movement. The deal acts as a nice reference win for Power - Big Blue is trying to stem Power's share losses to Intel's Xeon CPUs by selling to 3rd-party server OEMs and licensing the architecture to other chip developers. Its powerful Power8 CPU (12 cores supporting 96 simultaneous threads) began shipping earlier this year.
- Separately, the DOE says it will invest $100M in FastForward2, an R&D program to create more powerful/energy-efficient supercomputers. IBM, Nvidia, Intel, AMD, and supercomputer maker Cray (CRAY +0.1%) are among the companies taking part.
- PRs: IBM, Nvidia, Mellanox
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. 26, 2014, 12:00 PM
- Stifel has launched coverage on Cray (CRAY +6.5%) with a Buy and $33 target. Shares have jumped in response.
- Separately, Cray has launched the CS-Storm, an HPC/analytics accelerator system that supports up to 8 Nvidia (NVDA +0.8%) Tesla GPUs to go with 2 Intel Xeon CPUs. Cray claims the CS-Storm can deliver over 11 teraflops of performance per node, with 22 of them fitting on a standard 48U server rack.
- The Tesla line has turned into a major growth driver for Nvidia, as adoption rates for GPU-based co-processors within HPC systems keep rising. Nvidia declared on its FQ2 CC (transcript) Tesla GPUs "now power the world's 15 most energy-efficient supercomputers as listed in the Green500 list." A solution pairing Tesla with ARM server CPUs was recently shown off.
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
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. 23, 2014, 9:58 AM
- Pac Crest has downgraded GPU archrivals AMD (AMD -3%) and Nvidia (NVDA -2%) to Underperform. The firm cites checks that point to weak motherboard production and a major Q/Q drop in high-end graphics card shipments.
- Digitimes recently reported global graphics card shipments (not the same as end-user demand) were set to fall 30%-40% Q/Q in Q2 due to high inventories, and that AMD/Nvidia were responding by cutting shipments rather than prices.
- Separately, AMD has unveiled the FirePro W8100, a workstation card that support 8GB of GDDR5 RAM and 2.1 teraflops of double precision compute performance. A flagship card (the FirePro W9100) supporting 2.62 teraflops of double precision compute performance was launched in April.
- The W8100 launch comes shortly after AMD said it would direct more resources towards FirePro going forward. Nvidia's Quadro GPU line currently towers over the workstation market.
- BofA/Merrill downgraded Nvidia last week.
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%.
May 19, 2014, 10:26 AM
- In a bullish call on chip stocks, RBC's Doug Freedman has upgraded Nvidia (NVDA +2.9%), Broadcom (BRCM +1.8%), Micron (MU +3.3%), Texas Instruments (TXN +1.3%), and Altera (ALTR +1.8%) to Outperform.
- Freedman sees the industry's free cash flow profile improving as it transitions "into a more mature era," and companies embrace more "shareholder-friendly capital-allocation strategies."
- Nvidia, TI, and Altera have already announced major cash-return efforts in recent years. TI has promised to return all of its FCF to shareholders, save for funds needed to pay down debt.
- Micron (just digested Elpida) and Broadcom have been more cautious, though the latter did hike its dividend in January.
- Freedman downgraded Micron on Jan. 3, when shares were at $21.66. He was bullish during the company's big 2012/2013 rally.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
May 8, 2014, 5:21 PM
- Nvidia (NVDA) expects FQ2 revenue of $1.1B (+/- 2%), favorable to a $1.08B consensus. But gross margin is expected to slip to 54% from FQ1's 55.1%.
- In its CFO commentary (.pdf), Nvidia states GPU sales (81% of revenue) rose 14% Y/Y, even with FQ4's growth rate. Strong high-end PC GPU (GeForce GTX) and GRID (server GPU) sales provided a boost, as did continued Tesla (HPC CPU) growth.
- Tegra sales, which plunged 37% Y/Y in FQ4 thanks to share loss to Qualcomm and others, rose 6% Q/Q and 35% Y/Y to $139M on the back of higher smartphone and automotive volumes.
- Opex only rose 4% Y/Y, a marked slowdown from FQ4's 13% clip and giving a boost to EPS. A $500M share repurchase agreement was struck during the quarter; Nvidia added $1B to its buyback program last November.
- Nvidia released its core FQ1 numbers on Tuesday after accidentally e-mailing a draft.
- Nvidia's full earnings release
May 6, 2014, 9:28 AM
- Though Nvidia (NVDA) originally planned to release its FQ1 results on Wednesday, the company was forced to release its core numbers early after a preliminary draft was accidentally e-mailed to ~100 people.
- FQ1 gross margin was 55.1%, +130 bps Q/Q and +50 bps Y/Y, and above guidance of 54.5%. That provided a boost to EPS, as did the fact opex only rose 4% Y/Y, less than FQ4's 13% and below revenue growth of 16% (up soundly from FQ4's 3% growth).
- Nvidia's guidance and full FQ1 results will be delivered on Wednesday, as originally planned.
- FQ1 results, PR
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