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Friday, 09 July 2010 10:12

Nvidia shares still plummeting

Written by

Nearing a 52-week low
Recent volatility in the market has affected all tech stocks, but thanks to compounding concerns and poor analyst ratings, Nvidia has seen a sharp fall over recent months.

Two months ago Nvidia was trading at $16.99, a month ago it was down to $12.10 and now it closed at $10.34. Some 18 months ago, the stock was selling at $7.95, but it recovered to $18.68 in December 2009. Before the onset of the recession, in mid-2007, the stock was trading above the $35 mark.

The recent slump in prices can be attributed to market trends, but it’s worth noting that analysts have been anything but generous when it comes to Nvidia. Several analysts have issued sell alerts on Nvidia over the past few months and although we don’t exactly agree with all of them, they appear to have taken their toll.

In fact, Nvidia appears to be on the road to recovery. It is about to introduce several new products that might boost its core business, such as new mid range and low end GF 104, GF 106 and GF 108 cards. Its mobile graphics business also seems healthy and Tegra appears to be gathering steam. The really big question is when these new products will start to make a positive effect on earnings.

On another note, should its shares continue to dive, they might eventually be used to plug BP’s gusher in the Gulf of Mexico.
Last modified on Friday, 09 July 2010 12:30
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+18 #1 johndgr 2010-07-09 12:04
"The really big question is when these new products will start to make a positive effect on earnings."

That is the reason for the stock going down. We are waiting for the cards, waiting for Tegra, almost none REALLY uses PhysX which is crippled on the cpu (and I don't see you posting anything in the news), we have no nvidia chipsets, no next gen Nintendo. OpenCL is coming to kick CUDA and the new Predators was made using full AMD hardware. Pure hell!!!
I hope the best for nvidia but it is going to take time. We could see the stock going up to 12-13$ but with no REAL news it will go down again. Much lower than 10.
-1 #2 BernardP 2010-07-09 13:35
When the shares of a well-established company are down and everything seems negative, it often means that it's time to buy them. It would be interesting to look a mandatory disclosure to the SEC of management's stock transactions... Are they selling or buying?
+12 #3 spigzone 2010-07-09 15:10
Seeing as 4850's sell under $100, 5850's and 5870's surely could sell for half their current price and still turn a tidy profit. Nvidia's graphic card business will be under ferocious price pressure for the rest of the year, at a minimum.

Add in upcoming fusion which will start dismantling Nvidia's oem market and Nvidia's profit margins are going to be increasinglyh squeezed.
+8 #4 CompWiz 2010-07-09 17:26
I have to agree with johndgr and spigzone; nVidia's stock is going down for good reason.

Their Fermi card is very expensive to produce, far more so than ATI's Evergreen. Plus, it was late, and it consumes massive amounts of power.

So, when the price wars happen, they'll either have to keep their prices high, or start taking a loss on each card sold. In fact, some people say that they're already taking a loss on some of the cards they're selling.

ATI could cut their card prices in half and still make a profit.

Clearly, nVidia's market position is bad, their video card partners are dying off(R.I.P. BFG), and ATI just keeps pushing out new faster cards.

Not only that, but their motherboard line is dying off as well.
+4 #5 pogsnet 2010-07-09 19:05
Nvidia is a dying company, what concerns more than that?

No more latest product innovations, just crippled products but still not out in the market.

AMD is cooking another next gen GPU and APU which will be out soon and spoil all these efforts made by Nvidia. That is really alarming to investor.
+3 #6 nele 2010-07-09 22:15
I think it's still way to early to write off Nvidia. It has gone through rough patches in the past and recovered and the same is true of ATI.

The really worrying part is that the company hasn't had a truly successful architecture since the G92 which launched nearly three years ago. If you look back at ATI in 2007, it had the R600, which was complex, expensive to produce and consumed way too much power. Fermi is Nvidia's HD2900.

However, ATI quickly learned the lesson. It simplified its design with the 3800 series, caught up with NV with the 4800 and eventually it took a huge lead with the 5800.

It took ATI just one bad card and two quarters to get back on track with the RV670, but Nvidia just keeps making expensive, complex chips that can't turn a profit, i.e. the GT200 and GF100...
+2 #7 GrapeApe 2010-07-10 05:19
Quoting BernardP:
When the shares of a well-established company are down and everything seems negative, it often means that it's time to buy them...

Like Nortel, Palm & Lehman brothers? :-*

nVidia needs profitable new products. They have good products, but their margins are far more squeezed than in the past, so their stock price being depressed makes sense, and a GF104 whose die is bigger than Cypress/HD58xx VPU isn't likely to help with those margins.
There's little chance of nV getting in the aforementioned companies' situations, but they are going to struggle like AMD did during the R600 era when they faced competition from Core2 too.

Of course there's always nV marketing to try and help, that's their most successful division. :D
-1 #8 yourma2000 2010-07-10 22:21
the only advice I would give to Nvidia would be to stop [censored]ing around with technologies such as CUDA which are irrelevant to the sole purpose of a graphics card.

I remember before Fermi was released, people were saying that the card itself could independently run an operating system, so bloody what?! if I'm on the market for a graphics card I want it to run games, not friggin Windows!

AMD are keeping it simple, doubling the speed of their GPUs every year and using the absolute latest in graphical technology to increase performance and visual quality, this is why AMD are winning marketshares, because they know what gamers want, I'm starting to think Nvidia & AMD should swap slogans.
+2 #9 dicobalt 2010-07-10 23:33
Why is everyone surprised? Nvidia is a software company remember?
-2 #10 liveonc 2010-07-13 23:22
Quoting yourma2000:
the only advice I would give to Nvidia would be to stop [censored]ing around with technologies such as CUDA which are irrelevant to the sole purpose of a graphics card.

So they get to rot it out with AMD/ATI? Even Intel acknowledges the potential of CUDA, which isn't good, that means Intel is out to get them.

Read an article about VIA selling stocks & Nvidia maybe interested, but if they want too much, there's always SIS. Even IBM didn't need Cyrix that much.

Maybe if Jobs was really hip on the iPad, or others want clones, Tegra has a bright future. Otherwise Nvidia needs that x86 license if it really wants to go that way.

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