nVidia is now #2 financially in the graphics world.

[digitalwanderer]

Are you allowed to give an opinion on which company you think is bigger or in a better financial position now, or is that against professional ethics or something?

Absolutely I'm allowed, because I'm not a regulated analyst.

I won't, though, because I am pleading "not enough information" and besides it's a Saturday and I look through enough numbers during the week

LOL, sorry. I have a feeling you're bothered alot about it and I don't want to pester ya when you've already been so generous to explain it to me.

Thanks Gnep, I really do sort of "get it" now.

 

[Gnep]

LOL, sorry. I have a feeling you're bothered alot about it and I don't want to pester ya when you've already been so generous to explain it to me.

Hehe no worries at all. In fact I'm not too bothered about it, which is why I'm not going to do any "work" on it... but disclosure is not something I have to worry about - I work in the oil industry which has virtually nothing to do with this, so no conflicts of interest...

If you find it interesting, you might want to have a look at some introductory finance books And no, us "finance people" do not all earn pots of money - if only!

 

[tamattack]

Unfortunately drawing a comparison with an individual here is difficult - we don't have "equity" (although we might well have debt... ).

Actually, we do have "net worth". That is, all my assets (house, car, cash, investments, etc...) minus all my debts (loans, mortgage, credit, etc...) equals my net worth, which is probably as close a comparison we can make individually to the situation with a corporation.

[EDIT: nice to know I'm not the only 'finance' person around here.]

 

[Gnep]

The problem with this "net worth" is that it misses out the most important asset of all - you! You have much more potential (usually!) to earn a significantly more than your investments ever will. Unless of course, you are

(a) At or near pensionable age
(b) In the lucky position of having inherited a shedload
(c) Particularly crap at everything, but then you aren't likely to have many investments either!

As one economist once put it - "the only thing we can't easily measure using the unit of money is perhaps the most important thing of all - the love of a mother for her child." Or something like that, anyway.

Besides, we're way off topic now:

NVIDIOTZ SUCK! FANATIKZ BLOW

 

[digitalwanderer]

Besides, we're way off topic now:

NVIDIOTZ SUCK! FANATIKZ BLOW

Ok, then back on topic we shall go...thanks for the quick tangent/education though, it really is appreciated.

Where were we, oh yeah....

ATI IS NUMBER ONE!!!!

ATI IS NUMBER ONE!!!!

ATI IS NUMBER ONE!!!!



EDITED BITS: I forgot to bold me ranty cheer, it just doesn't say "total fanboy" if ya don't bold it....

 

[WaltC]

I've never seen much value in looking at market cap numbers like this. Because they're based on stock pricing their value is always fluid. Also, last year the fact that ATi's market cap was significantly lower than nVidia's was no barrier to ATi releasing a far superior product and getting it into the channel and out to the market. Generally, market caps will follow product differentials, although certainly not immediately in many cases. Having the "biggest" market cap is nowhere near as important as having "enough" market cap to get the job done, IMO.

 

[digitalwanderer]

Having the "biggest" market cap is nowhere near as important as having "enough" market cap to get the job done, IMO.

I dunno, the more I hear about how nebulous it is to figure out success by the financial indicators the more I think I'm justified in basing me own personal analysis' of the respective companies on their current ability "to get the job done"....of which I think that ATi is totally blowing nVidia out of the water with and nVidia just seems to keep compounding their errors in their efforts to try to correct it at every turn.

EDITED BITS: Changed the last sentance so it made sense, I had a brainfart while typing. (It's Saturday, lay off! )

 

[tamattack]

Gnep, you're right of course in that net worth is a limited comparison, but it is a relatively straightforward way to introduce the concept to non-financial types.

 

[WaltC]

Having the "biggest" market cap is nowhere near as important as having "enough" market cap to get the job done, IMO.

I dunno, the more I hear about how nebulous it is to figure out success by the financial indicators the more I think I'm justified in basing me own personal analysis' of the respective companies on their current ability "to get the job done"....of which I think that ATi is totally blowing nVidia out of the water with and nVidia just seems to keep compounding their errors in their efforts to try to correct it at every turn.

EDITED BITS: Changed the last sentance so it made sense, I had a brainfart while typing. (It's Saturday, lay off! )

Heh-Heh... I know what you mean...following the sometimes bizarre perturbations financial analysts proclaim to use is often like trying to navigate a hazardous channel without the aid of navigation buoys...

But you are illustrating just what I mean--nVidia's problems have stemmed from causes other than the company's market cap....

 

[Joe DeFuria]

Sorry Joe, I agree with the rest of your post, but this bit is a little off. The "Equity" in the D/E ratio is not the "cash in the bank".

Damn....

 

[digitalwanderer]

nVidia's problems have stemmed from causes other than the company's market cap....

So it is probably more accurate to judge their current standing based on outside influences/actions than their financial standings? Basically I guess I'm asking if it's fair to say that their financial indicators are more affected by how they've been shooting themselves in the foot with the PR BS then anything else?

Is it useful to gauge their success/failure based on how their market indicators have been reacting of late? (Sort of a steady decline I believe)

 

[WaltC]

So it is probably more accurate to judge their current standing based on outside influences/actions than their financial standings? Basically I guess I'm asking if it's fair to say that their financial indicators are more affected by how they've been shooting themselves in the foot with the PR BS then anything else?

Is it useful to gauge their success/failure based on how their market indicators have been reacting of late? (Sort of a steady decline I believe)

Well, I think their shooting themselves in the foot over the past several months is entirely a secondary phenomenon subordinate to the fact that they haven't been competitive in the 3D market with their products for most of the last year, and illustrates the degree to which this is hurting them. nVidia's primary strength in the market post 3dfx and pre-R300 had been its 3D products, which had fueled mainstream adoption of nVidia products in the market as a whole (even for budget, low 3D, primarily 2D performers like the MX series.) Losing this lead in 3D makes a sound reverberating through all of nVidia's markets and works against them, for the same reasons. In that respect diminishing market cap is also a secondary effect to be expected under the circumstances.

Basically, I'm just saying that all of it, market cap included, hinges on the products shipped and their reception by the markets at which they are aimed. Generally, though, market cap numbers can be meaningful in the sense that it takes a trend occurring over time to influence them significantly. They make the trends we've all been observing between the two companies over the last year concrete in the sense of dollar-worth as perceived by investors when buying the respective stocks.

 

[digitalwanderer]

The more I try and understand it, the more it makes my brain hurt!

Screw it, please just tell me if anything important happens financially with either company and I'll trust you bigbrains on it.

 

[OpenGL guy]

but they and they outsell and out margin ATI. Of course, they're undergoing a severe shortage of financial confidence right now.

"Out margin"? How do you figure? nvidia's margins last quarter were under 29%. ATI's previous quarter margins were 32.9%.

 

[RussSchultz]

I'm only going by what's on the yahoo site.

 

[digitalwanderer]

but they and they outsell and out margin ATI. Of course, they're undergoing a severe shortage of financial confidence right now.

"Out margin"? How do you figure? nvidia's margins last quarter were under 29%. ATI's previous quarter margins were 32.9%.

Aw, don't listen to Russ OpenGL guy...we all know the real score!

ATI IS NUMBER ONE!!!!

ATI IS NUMBER ONE!!!!

ATI IS NUMBER ONE!!!!




(Sorry, I'll stop now. )

 

[OpenGL guy]

I'm only going by what's on the yahoo site.

http://www.ati.com/companyinfo/ir/2003/atiq303.pdf
See page 4.

 

[Gnep]

The problem is that comparing overall gross margins (as % of proceeds) between two companies who do not have exactly the same product lineup produces rather meaningless results. I'd even go so far as to say that for ATI and NV, whose product/GM split varies over time significantly I don't doubt (tech industry being fast moving and all...), comparing the same company with itself a year earlier can give misleading results.

Besides, there is a lot of leeway on what is and isn't included in "Gross Margin" so the difference in accounting policies between the two companies may even be a significant factor!

From the viewpoint of Beyond3D regulars, what you must remember is that what you are mainly interested in (high-end 3d hardware/accompanying software) does necessarily match the spread of net income/GM/Proceeds over product lines for these companies.

Bottom line: don't try to read too much into the financials

 

[RussSchultz]

Gross margin doesn't tell the whole story.

EDIT: which sounds awful simplistic posted right after GNEP. Darn you!

 

[digitalwanderer]

I like just chanting "ATI IS NUMBER ONE!!!" a whole lot more than arguing over financial esoterics.