Another nVidia/GF FX concern?

If your definition of "relative strength" is 50 cents above all time low, then you are right

 

Using your own logic, ATI delivering Radeon 9700 causes their stock to decline. In fact, they are down more than NVDA in the last 3 months period.

 

@Jene: I only have two words for you: "insider trading". That is big news in the north not as much down here in the states. SO thats might explain why they have been taking the hit for the last 2 or 3 months. when your top guys do something so unethical the stock does rightly so take a hit.

later,
ps thats why i think ethics should be more important than it is right now.

 

How convenient you draw the cutoff dates. I bought NVDA at $12, sold $80+. ATI never had that kind of performance. Yes, if you shift the emphasis to the "bear" market, ATI has been doing better in the bear phase, but only because NVDA's high flying stock had so much more to lose and is much more volatile. Anyone with a high performing stock from the bull market lost alot. ATI's stock durng the boom wasn't a high flyer. ATI stock has a much narrower trading range.

Neither company at the moment is a good buy in this market. I'd put my money elsewhere, I certainly did. As much as I like these companies, and as much as I love video cards, I'm not sure people are buying this stuff at the moment.

However, if you look purely at the fundamentals: margins, costs, earnings over the last quarters, NVDA looks much better than ATYT. That may change during the next quarter, and you may see the results of the R300 make a difference: Let's wait and see.

 

"Let's wait and see."

here here

 

What point exactly are you trying to make, Nvda was $60 about 2 years ago and $10 now, I dont know what school of investing you're from but buying ATi 2 years ago for about $5 would have been a much smarter investment relatively(which is why i used the word), but maybe you like losing money what do I know.

You clearly have no idea about what you're talking about, last quarters results showed over $100 million in increased revenues, which ATi has already attributed to the 9700. Also its been confirmed by analysts that this revenue gain came almost exclusively at the expense of Nvda. Also Nvda's earnings look good??? Their earnings for last quarter were originally set at .53 a share, this was revised down massively to .08 a share, then Nvda missed the revised earnings estimate and posted a loss? How on earth is this good?

 

The price of Nvidia's stock during the years of the "bull" market had nothing to do with their actual performance either. It should be obvious to everyone now, whether it was at the time, that the "bull" is just the first half of bullshit. It was all just speculation. People threw their money around, just expecting it to go up and give them insane returns. Yeah, if you invested in Nvidia at $12 you made a killing by selling at $80, but that was also true of all other tech stocks. In the end it was the chumps that were left that got stuck holding the bag.

I'm not arguing that Nvidia may or may not be the lesser of two bad investment opportunities at the moment. But I think Nvidia's success had a lot more to do with marketing and PR than their bottomline. And, obviously the euphoria of the period had a huge impact. In contrast hardly anyone know who ATI was, even though they had a pretty large share of the market.

 

I don't know what school of investing you are from, but I can pick any given range of days in hindsight from the market and tell you how you could have made money. In hindsight, buying NVidia when it was $12 and then selling when it was over 70 and then taking that money into a different sector (not tech) after the tech sector bust would have been the smartest thing, not investing in ATI two years ago. What if you had bought Nvidia 5 years ago, and ATI three years ago and held them to this day? Nvidia gain, ATI loss.

If you artificially fix the buy date at Nvidia's highest point, that would be stupid right? First rule of investing: buy low, sell high.



Fact is, NVidia delivered impressive gains over a far longer period than ATI. If you want to fixate over the bear market era, go ahead, but telling someone they should have invested in ATI two years ago isn't exactly smart advice, just like holding Nvidia wouldn't have been smart.

You clearly have no idea what you are talking about. NVidia's revenues still increased last quarter in the 10-Q filing I saw by over $400 million from the previous year. Nvidia's margins are lower. Nvidia has lower operating expenses. Lower debt ratio. More cash reserves.

Call me up when you've made as much money off ATYT as I've made off NVidia.

 

WHAT!?!? Nothing to do with their performance!? Did you ever look at their quarter over quarter growth during that that period?

Alot of other .com companies were BULL. Hyped up stock prices and ZERO profit, huge losses. The e-commerce/portal/media companies are chief examples. But NVidia during the "bull" years, along with Dell, Intel, AMD, and others built REAL companies on top of REAL sales.

NVidia over the "bull" era consistently doubled their earnings every quarter. You can't tell me that going from $0 to over a $1billion in revenue in just 5 years is a vaporware bullshit company whose stock value is built on nothing?

If growing a company to $1+billion in revenues in 5 years is a bullshit speculative company, then what the hell do you have to achieve to be considered a "real" achievement?

It is also simply not true that you could have put your money into any tech company and made a profit. Many IPOs self-destructed before the lockout period ended. Except for the underwriters, many IPOs were a bust.

The fact is, if you had bought Nvidia at the start of the bull market, you would still have a modest gain today. You can't say that for 90% of the new tech startups during the same period.

 

Nvidia stock split several times as well (twice I believe), so comparing dollar to dollar is a little bit disengenous.

I made a nice killing on their stock a few years ago (I too sold when they were really high, just after they got the xbox deal).

They are probably still a good investment today

 

ATI went public in Canada on 11/19/93 at a split adjusted price of $1.25 per share (Canadian). Today's closing price was $7.24 (Canadian), or a total increase of 479%. If you figure it's been 9 years (it's really been 9 years, 2 months), that works out to an annual rate of return of about 21.6%.

Nvidia went public in the US on 1/22/99 at a split adjusted price $4.75 and closed today at $10.49. The total increase was 121%. Over the 3 years the annual return is about 30%.

So depending on how you want to look at it, ATI has made it's investors much more money overall since it went public, or Nvidia has made it's investors more per year since it went public.

Also, remember that ATI didn't start trading on the NASDAQ until years after it first went public. You'll have to check the price history on the Toronto stock exchange to go back further. For that, you can go to Yahoo stock quotes and enter 'ATY.TO'.

 

simple answer

you can't compare 10 years to 3 or 4 years.
The difference concerning stock market is huge.

 

Right, but if you bought in '99 4.75 and sold in Jan 02 at $71, your annual return rate is exp(log(71/4.75)/3) = 146%. So it all depends when you bought and how long you held, as is always the case.

However, aggressive investors move their capital into the highest performing stocks at a given time rather than let them languish until their high rate of return is "averaged out". Nvidia's return over its short boom period was 1394%, and it's revenue and earnings growth over that period was equally as impressive.

Perhaps 4 years from now, we can look back at Nvidia's long term performance, but taking a small 1 year window in a cyclical business cycle isn't exactly the big picture.

All I know is, I made impressive gains in NVDA and bought and sold at the right time (got lucky)

 

Actually thanks for pointing out a mistake I made. I used 3 years since the NVDA IPO instead of 4. It seems I still can't get used to the idea that it's now 2003. When I redo the math, NVDA's annual rate of return is 21.9%, a whopping 0.3% better than ATI. I wonder if they can keep it up for another 5 years to match ATI.

And if you bought ATI at it's low in '97 of 1.97 and sold at it's '99 high of $18.18 (both $US), you'd have had a 203% annual return. Which is just as meaningless as you buying at the IPO and selling right at the perfect time.
You said you bought NVDA at 12, sold at 80+, and that ATI never had that kind of performance. You're right. That's only +640%(assuming you sold at 89). ATI was +822%.

Aggressive investors during the bubble chased after the already highest performing stocks and got extremely lucky. The smarter investors usually got in much earlier and didn't chase after already hot stocks. Doing so is typically a mistake because it is difficult to remain that hot. That's why tons of people lost tons of money when the bubble finally burst. Perhaps you'd like to meet some ex-dot.commers I know whose stock went up to the $150 range before crashing down to < $0.50.

A small 1 year window? I was talking about NVDA's entire 4 year existence as a public company.

That's exactly it. Luck. Nothing wrong with that. I wish I were luckier and sold at just the right time, and I'm sure I'm not alone in that.

They were at the right place at the right time, both product wise and stock market wise. Nvidia was never really worth $80/share. They were extremely overpriced. I made a decent amount of money both short selling them and buying puts.

Of course none of this has anything to do with 3D Technology and Hardware, so I suppose that's enough on this...

 

this is interesting, I had a huge interest in nVidia stock and tracked it since the IPO, nvidia's high of 70 something this year was after 2 splits so in effect their price went from an IPO of 12$ to around 280$ in around 4 years. This is a massive return on investment. Today the stock has sunk because of doom and gloom in the tech sector.. People are still amazed that they are increasing revenue in this market but they don't dare buy because of the general cynicism in the market. A smart investor made around 3000% gains on nVidia, that's a good company. They have outperformed ATI in everyway since the TNT and they were a much smaller and inexperienced company at the start. Anybody who thinks ATI has been the top performing graphics company in recent history is misguided IMO. ATI has been the top performing graphics company for the last six months, and that's it. (obviously not top performing in the pure business sense (because that's still nVidia) but the technological sense (which is what we all care about right?) ) .

This opinion is based upon information that I saw that said NVidia growing revenue by somewhere around 30% this year while ATI was in the 5-10%. If my figures are off please let me know and quote me a site. I can easily change my mind.

 

You're missing the fact that it split.

I am an ex-dot-commer. I founded two companies and sold them. At the time of acquisition, in April 2000 (the height of NASDAQ), my share of acquisition stock was worth $5million. 1 month weeks later, it was worth almost zero. The founder of the company who acquired my company, before the crash, was worth almost $1 billion on paper. A few weeks later, he was back to eating ramen. Just about everyone of my close friends is an ex-millionaire-on-paper. Former Netscape, Viant, VA Linux, Verisign, etc early employees.

But your comments are irrelevant. NVidia is NOT a DOT COM bubble company. Companies like TheGlobe, epitomized that era. Stocks that soared and had no customers, hardly any revenues, certainly no earnings, and not much intellectual property either.

Nvidia is a company that had a real product, real customers, and sold lots. It was NOT luck. They built a great product during this time, compared to their major competitors, and they executed very well. ATI existed through this bubble era, but did not have such a huge growth rate.

Yes, a company that went from $0 to $1 billion in 4 years. How long did it take for ATI to exceed 1 billion in revenues? How much did their revenues increase during the 4 years NVidia was rising?

So according to you, Nvidia's entire success can be attributed purely to luck? They got $1billion in revenues based on luck right?

 

All this is well and good, but your original point of contention was that ATi and Nvda are slaves to the market and track almost identically; this point has been proven wrong so is there any other pearl of wisdom you have regarding the stocks?

 

A $200 million US dollar injection from M$ helped things along nicely to accelerate the growth..being in the right place at the right time.

 

elchuppa - All the numbers we've been talking about have been adjusted for the splits.

I've been using split adjusted numbers in everything I said so far - hence the IPO price of $4.75 instead of $19, because of the two 2-for-1 splits. Since the current price of NVDA had never been $12 until the middle of 2002, I assumed you were doing the same. I guess I must have been expected to read your mind and infer that you were including one split, but not the other in your calculations?

Nvidia is not entirely a .COM bubble company, but the lofty heights their stock went to was entirely a function of that same bubble. No matter how well they were doing (and they were doing quite well), they were never really worth $80/sh by any rational method of accounting. Not even close.

Yes, they had real products and real customers and real revenue, and they worked hard. However they were also blessed with the poor management at 3dfx and an ATI that was asleep at the wheel and which had problems with a missed product cycle. Those factors were all part of what made them so successful - ALL of those factors, both their internal and the external forces. Their absurdly high stock price, however, was very much luck. At one point they had a market cap of $10B. While their market cap deserved to be increasing, if you can sit there and tell me they really were (or are) worth $10B, then you must still be living at those .coms back in the year 2000.

It's not like they sat around doing nothing before they went public. They had revenues of like $200m+ when they went public. Remarkably similar to the amount ATI was making when it went public. And it was (I believe) 5 years after the IPO that ATI topped a $1B, though it might've been 6. The fact that you can point out ATI's revenue decline means you must be smart enough to see that the market NVDA was playing in was relatively fixed in size and not growing in huge leaps. Given that, I don't see how you can believe they were worth $10B, even if they owned the entire market.

No, I didn't say pure luck. But luck had a big role in it, as it does in many things. Had 3dfx been better managed, or had ATI not missed a product cycle and executed better, they likely would not have hit $1B so soon. Those things were outside of Nvidia's control. It was also luck that these same events all happened at the same time as a huge bubble in the stock market, making their $10B valuation very lucky indeed. Though I bet the person you sold your shares to at $80+ doesn't quite think so. Those same artificially high stock prices allowed them to also do a secondary offering, which raised a huge amount of cash (much more than the shares are worth now). Again, fortunate timing.

Their success was not all luck, but if you think luck had nothing to do with it, then you should by all means bid their stock up to $80 again.

 

I'm not talking about the "luck" of their stock price. I'm talking about their revenues and earnings. You seem to want to downplay NVidia's success and somehow chalk it up to them being lucky and not because they worked hard and took big risks.