Seeking Alpha

joshpritchard

joshpritchard
Send Message
View as an RSS Feed
View joshpritchard's Comments BY TICKER:
Latest  |  Highest rated
  • Google Finally Writes Nvidia's Euology With Nexus Snub [View article]
    They have 20 years of experience in engineering graphics hardware and software. That's the main competitive advantage.

    They have cash and are generating more. Unlike Yahoo when it was bottoming, NVDA's business is growing. The GPU business actually grew last year. Tegra grew. And the payments from INTC came in as scheduled. Gross margins hit a record high, as did revenue.

    They have new addressable markets this year that are HUGE relative to the PC dGPU market and the market for SoC's without a modem. GRID VCA might not take off... but even a few thousand units a quarter would mean $100M+ in incremental GPU revenue. Selling 500K Shields into the holiday season at a theoretical ASP of $350 would mean $175M in revenue added to the Tegra business. If they actually sell as many units of the Shield as Sony sold of the PS Vita, a market failure, Tegra's top-line would roughly double this year before factoring any incremental revenue from the Tegra 4i.

    I think you might have a more informed thesis on AMD than NVDA.
    Mar 20 03:49 PM | 2 Likes Like |Link to Comment
  • Google Finally Writes Nvidia's Euology With Nexus Snub [View article]
    also since you say "As it stands now I fully expect it to be sold for parts and IP by the time the dust settles on this era of computing" it'd also be helpful to see your analysis of what the value would be in that ultimate bear case, to understand just how far below $12 you think the stock will go. Personally I think the $6/cash/share, $600M in guaranteed remaining from INTC, appreciating real estate assets, and significant IP portfolio gives them a nice cushion even if their products fail (which I don't expect them to), but it'd be nice to see your analysis.
    Mar 20 02:44 PM | 1 Like Like |Link to Comment
  • Google Finally Writes Nvidia's Euology With Nexus Snub [View article]
    not to answer for Ashraf, but I'd love to see your full trade recommendation. It'd be particularly helpful if you could cite actual sources and demonstrate an understanding of NVDA's product portfolio and market positioning, and why you think it's flawed, and what you think failure to execute will look like. E.g. quantifying how you think their revenue growth will slow, where gross margins will decline, etc, rather than just using vague statements like saying you think "2013 is the year that Nvidia is finally called to the mat for their treatment of OEMs".

    Maybe some analysis of how their GPU business grew last year when the broader PC business declined, how they grew revenue by selling more higher ASP/higher margin dGPUs and why that trend won't continue, how AMD will reverse the share loss in the dGPU market, etc. Then putting that into context of a company trading at ~$12.50 with $6/cash/share while the GPU business is actually growing in the face of the worst PC market in history. Any thoughts on the huge new SoC w/LTE market that they can now address, and why that will fail, etc (I realize AMD can't compete there so maybe it's off your radar?).
    Mar 20 02:35 PM | Likes Like |Link to Comment
  • Google Finally Writes Nvidia's Euology With Nexus Snub [View article]
    @Tom, I'm not sure you understand the GRID product. It's not just about gaming. Cisco, HP, Dell, etc are signed up because the GRID appliance is aimed at providing "workstation class" GPU computing across an enterprise, e.g. instead of 12 designers at a company getting a workstation with a Quadro GPU, you get one single appliance that can let anyone tap into the processing power from a thin client (e.g. a Macbook Air). If you have the time, checkout the demos the company showed yesterday, probably faster than reading up on it (which I'd also suggest you do before strongly advising a sell/short on the company, but you've said you have limited time)

    @TommB0y, I mentioned semiaccurate because Tom did in his original post. But yes, I do think that NVDA decided the opportunity cost of competing for the console wins was too high. They've been in the consoles. They understand the economics of those deals. They have limited engineering resources and decided it was a better investment to focus their resources on going after much larger market opportunities... they took a good deal of time explaining the rationale yesterday -- it's worth listening to if you're considering selling/shorting as the author of this article suggests we do. And yeah, I'm sure AMD would love to show that they can be a strong contendor in the ARM SoC space, but they've been pretty explicit that it's not even on their roadmap near-term. They don't have the resources to go after all the markets they'd like to be able to address; they too have opportunity costs with their limited resources (and are clearly in a much more difficult financial position than their competitors, hence headcount reductions rather than hiring more engineers, as NVDA and QCOM are doing).

    BTW, I'd love to be able to go long AMD and believe there's a defensible bull thesis there, but I just can't. I am long QCOM and NVDA, though.
    Mar 20 02:12 PM | 1 Like Like |Link to Comment
  • Google Finally Writes Nvidia's Euology With Nexus Snub [View article]
    "Now that is behind them and Qualcomm can and is shipping seemingly billions of its Snapdragons in all variants..."

    Hmm.. don't think that's anywhere near accurate.

    "Look at the reasons cited by Google as to why it chose the Snapdragon over the Tegra 4 - cost, integrated LTE and, most importantly, availability"

    Can you provide a link to any source where Google has actually commented on choosing Snapdragon, let alone confirming an updated Nexus 7? Inaccurate again.

    "Quad core SoCs running Android in 2012 were a stupid marketing ploy. And then they made things worse by adding another core to manage, driving up complexity to 'plaid'"

    So stupid it worked?

    "Honestly, Nvidia is the easiest short idea in technology. Its main business in discrete cards is dying."

    Have you looked at the actual numbers for their GPU business? It's grown each of the last three years, including the most recent one. Dying businesses don't grow 8% Y/Y.

    "It should say something loud and clear when AMD in 2012 was viewed as more reliable and more capable than Nvidia to Sony (SNE), Nintendo (http://bit.ly/YGbi8y) and Microsoft."

    You think reliability and capability is what won AMD the console designs, really? Ask Charlie at SemiAccurate about that one... or anyone follows the space. "Simply put" -- as you seem fond of saying -- that's inaccurate. Would you also say AMD was viewed as more reliable and capable than Intel to Sony, Nintendo, and MSFT? If not, perhaps you should revisit your logic.

    "Then let's watch the carnage in the graphics space as AMD continues to work towards mobile dual graphics with first Richland and then Kaveri, which should bury any thought of a place for Nvidia at that table either. It's not that all of its products are bad, it's that not enough of them will be good enough real soon now."

    Hmm. Richland and Kaveri are going to cause carnage in the graphics space? Which of Nvidia's GPUs do you think they actually compete with? Have you done any analysis whatsoever on where NVDA's GPU revenues come from? Hint: Richland and Kaveri don't compete in the same space.

    "HP is rumored to be kicking the Tegra 4 tires but it is seriously cozying up to AMD for Kabini and Temash allocations. Somehow the price and margin conscious HP (http://bit.ly/vi2QiW) and Tegra 4 just don't seem like a good fit, no matter how desperate HP is to make an Android tablet."

    Kabini and Temash are unproven x86 chips. HP wants/needs to bring and ARM-based tablet to market. Why doesn't Tegra 4 seem like a good fit again?

    Prediction: Tegra 4 ends up in several tablets, chromebooks, next-gen Windows RT devices, and notebooks running Android. IMO it probably even finds a home in a "Nexus" Chromebook this year. Google is smart enough to realize they need more than just QCOM as a strong ARM SOC supplier that they can collaborate with, even if you don't understand it.

    AMD is headed for bankrupty unless they get a serious cash infusion. Meanwhile NVDA is buying back stock, paying a 2.5% dividend, building a new campus, and still adding to their cash pile. Their Grid product is being brought to market with Cisco, HP, and Dell. The company still has $600M in royalty payments coming from INTC.

    Seems like insanely bad timing to suggest a short now, vs say last fall when expectations for Tegra were actually increasing. Now you have expectations for Tegra at a trough, but a GPU business that's stronger than all analysts predicted, and growing its addressable market substantially with an enterprise appliance. Did you see that the Grid appliance carries not just a high GM on initial sale, but also includes license revenue of ~$300/year/core? Dang. From an investor's perspective, that's a much more attractive offering than anything AMD is doing, that's for sure. Consoles = low margin, or zero margin if the consoles don't actually sell.
    Mar 20 11:07 AM | 5 Likes Like |Link to Comment
  • Nvidia's (NVDA +0.4%) Project Shield handheld console will sell for $300-$400, Merrill reports an Nvidia exec stating. That would put Shield's price tag above the PlayStation Vita's $249, and the Nintendo 3DS' $170. It increasingly looks as if Nvidia intends for Shield to be a proof-of-concept meant to stoke gamer and developer interest in graphics-intensive, controller-based, Android games that could make good use of its Tegra processors. [View news story]
    and also offer an increased value proposition to folks that have purchased, or are considering purchasing, a new graphics card for their PC. Get a GeForce 680 and above and the Project Shield will play PC games on the handset, using the GPU in your PC to generate the graphics and then stream them with ultra-low latency to the Shield (and if they want, from the Shield to their TV... allowing PC games to be played on your biggest screen with up to 4K resolution). It's more than Android games. I don't have the Merrill report to see whether they discussed this point or not--but Project Shield is more than just an Android-based handheld (though it is that, too).
    Mar 8 01:44 PM | Likes Like |Link to Comment
  • Nvidia And AMD Deal With A Disturbing Trend [View article]
    Not sure if you saw the other Press Release from Jon Peddie released two days before this one (both came out last week pushing sales of the larger research report) but you might find it interesting if not:

    http://bit.ly/Xi7Tz3

    Lots of negative Y/Y and Q/Q numbers reported, which an NVDA investor should probably put into context of the actual financial results for it's fiscale Q4 and FY12 (which were both better than Peddie's research would suggest, reflecting a better mix with higher ASPs and better margins on the GPUs that were actually sold).

    Also note this nugget:

    "Overall the trend for discrete GPUs is up with a CAGR to 2016 of 3.2%."

    And then also note that the report includes a lot of GPU end-products but notably doesn't include arm-based tablets or phones.
    Feb 27 10:42 AM | 1 Like Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    Worn&Fuzzy

    Tegra 4i is targeted at mainstream smartphones that'll cost $300 or less unlocked. The biggest segment of the market. I have only read about the 800 being aimed at the high-end, and don't know if it's even intended for phones (as opposed to phablets/tablets).
    Feb 20 11:54 AM | 2 Likes Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    hisaak,

    HTC One is scheduled to start shipping in Q2, per the announcement yesterday, and won't be fully launched until end of the quarter. So April-July. That's roughly inline with when Nvidia said the T4s and T4-based Shield will ship. Though outside of the Shield, other T4-based devices likely won't be commercially available until calendar Q3. Still, not too much difference in timing there.
    Feb 20 11:47 AM | Likes Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    elnino5471, have you seen any smartphone with an SDR like the i500?
    Feb 20 11:32 AM | Likes Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    elnino5471 in the same press release from Nvidia about the T4i, they also announced the Phoenix, an awesome sounding reference design that had some beautiful renders. check it out. Also the reporting says the T4i is coming by EOY -- where are you hearing 2014Q1 for commercial sampling? Also did you see that T4i is not targeting the high-end?
    Feb 20 11:32 AM | Likes Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    agreed on all counts -- i was just pointing out for fidgewinkle (and others) that these chips will feature Cortex A9s that have a newly revised/improved architecture -- called simply "Revision 4" -- that we haven't seen any benchmarks for. But since they're improvements that ARM wanted to come out and get behind in NVDA's PR, it seems safe to assume that the R4 A9s will perform even better relative to the Kraits than the ones in the benchmarks you linked to (even if holding holding clock-speed constant... but we probably won't ever see that comparison, since the clock-speed is also being raised meaningfully).
    Feb 19 04:53 PM | 1 Like Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    or, as far as dismissing the T4i as being the same as "existing A9s", how about this blurb from NVDA's press release directly quoting ARM's VP and GM of processors (also included in the TomsHardware article):

    "Tegra 4i is the very latest SoC solution based on the ARM Cortex-A9 processor and demonstrates the ability of ARM and our partners to continue to push the performance of technology and create exciting user experiences," says Tom Cronk, executive vice president and general manager, processor division, ARM. "ARM and NVIDIA worked closely to further optimize the Cortex-A9 processor to drive performance and efficiency in areas such as streaming and responsiveness. This is an example of the collaboration and innovation that enables ARM technology-based solutions to be market drivers through multiple generations of SoC solutions."

    Maybe a lot of marketing noise but it does sound like even the A9s in the T4i themselves are improved (separate from the other improvements in GPU, integrated Icera SDR, and the more efficient 28nm process)
    Feb 19 04:00 PM | 1 Like Like |Link to Comment
  • Nvidia Brings The Fight To Smartphones With Tegra 4i [View article]
    the statement that "All of Qualcomm's device licensees pay Qualcomm the same royalty rate" is false. They've had some pretty high profile legal battles over the different rates agreed to with different entities, but pretty much all the details are sealed and confidential. QCOM even settled with Nokia specifically because they decided it was worth paying them a settlement to avoid divulging the terms of their agreement in court.

    Separately I'm pretty certain that Qualcomm has less of a choke-hold on 4G/LTE IP than with CDMA. Remember the Nortel IP auction? MSFT, AAPL, RIMM, etc teamed up to buy the portfolio of ~6K patents that included many patents deemed essential to the new standards. There's also Motorola's vast IP portfolio that attracted Google's acquisition in the first place. Also the ~500 patents/applications that Nvidia co-purchased from IP Wireless in May last year. Then you've got Samsung, Ericsson, and Nokia with big chunks of 4G/LTE standards essential patents as well. I'm sure the list goes on... but it's not nearly the same as with CDMA.
    Feb 19 03:52 PM | 1 Like Like |Link to Comment
  • Nvidia: Solid Quarter Marred By Weak Guidance And High OpEx [View article]
    also, since we're nitpicking here, the shares outstanding was a reduced by the $100M buyback in Q4, so the CFO commentary said
    "Diluted shares for the first quarter are expected to be approximately 619 million." Adds a couple pennies back!
    Feb 17 01:31 PM | Likes Like |Link to Comment
COMMENTS STATS
125 Comments
94 Likes