Another psychological stock milestone for ATI

[Joe DeFuria]

A share of ATI stock now costs more than a share of nVidia stock. 8)

As of about 3:30, ATYT is trading at 16.37, and NVDA is at 16.30

 

[PatrickL]

Hum making comparisons like that has absolutely no basis

The total shares x share value could be usefull to estimate how the market sees both companies and in that case ATI >>>> Nvidia

 

[Joe DeFuria]

Hum making comparisons like that has absolutely no basis

The total shares x share value could be usefull to estimate how the market sees both companies and in that case ATI >>>> Nvidia

Of course, a higher share price is just a "psychological" milestone as I indicated in the title. No real bearing on anything financially important.

 

[Sabastian]

Hum making comparisons like that has absolutely no basis

The total shares x share value could be usefull to estimate how the market sees both companies and in that case ATI >>>> Nvidia

Of course, a higher share price is just a "psychological" milestone as I indicated in the title. No real bearing on anything financially important.

Actually ATi better show some real increase in revenues tomorrow else, comparatively speaking of course, they are overvalued. From a long term perspective they do have some real good looking prospects that help prop the stock price even if they do not have such a great increase on their bottom line. Chipsets, MS Xbox2, Nintendo deal, handheld, laptop, set-top box and still holding firmly on the mid range and top end in the desktop realm. The only real gap is a low end DX9 solution but I am thinking the Radeon 9600SE will be priced for it. I don't see anything from nvidia but the FX5950 and unreleased drivers that reduce IQ so far.

 

[Joe DeFuria]

Actually ATi better show some real increase in revenues tomorrow...

Your wish is granted.

http://biz.yahoo.com/bw/031003/35126_1.html

 

[Dave Baumann]

35.6% margins! Shit, they are doing something right!

 

[andypski]

35.6% margins! Shit, they are doing something right!

I lkike to think that we are doing a few things right now and then...

 

[Dave Baumann]

Like type like right?

 

[mczak]

nice earings, despite the cirrus logic patent which cost them 9 million.

The suit claimed infringement of US Patent No. 5,841,418 issued on November 24, 1998 entitled "Dual displays having independent resolutions and refresh rates". On October 1, 2003, ATI Technologies announced that it had entered into a cross-license agreement with Cirrus Logic and has settled all outstanding litigation between the companies.

After a quick look at the patent (you can look it up at uspto.gov) this sounds to me like a quite obvious idea which probably everybody else would infringe too.

 

[hjs]

if by Friday at 4pm est, ATI closes over 17 a share, I will buy a brand spanking new ATI 9600XT card or nV FX 5700 Ultra (Your Choice) when I can get one and give it to someone on these forums.

 

[andypski]

Like type like right?

I think we should be allowed to get a few things wrong as well...

 

[RussSchultz]

Yes, Damn Cirrus. (They sued Sigmatel nearly out of business a few years back).

 

[Joe DeFuria]

35.6% margins! Shit, they are doing something right!

Despite all the talk about "technical" reasons given for not having higher clocked memory on their products, I still contend that this is the reason.

Increasing market share while increasing margins = no big need to push higher, and in fact, can be a detriment to their business.

Congrats ATI, on "doing things right!"

 

[RussSchultz]

35% GROSS margins isn't stellar, btw.

50-60% is what most fabless semiconductor companies shoot for.

 

[Joe DeFuria]

35% GROSS margins isn't stellar, btw.

nVidia wishes they as "non stellar" as that...

50-60% is what most fabless semiconductor companies shoot for.

Do most fabless semiconductor companies have 6 month product turnovers, and require the R&D expenditures that companies like ATI and nVidia have to remain competitive?

I thought it was well established that the discreet graphics chip market (at least at this time) was rather unlike "most fabless semiconductor companies..."

 

[RussSchultz]

35% GROSS margins isn't stellar, btw.

nVidia wishes they as "non stellar" as that...

I'm sure they do, but what does that have to do with anything? Why is this always ATI vs. NVIDIA to you?

50-60% is what most fabless semiconductor companies shoot for.

Do most fabless semiconductor companies have 6 month product turnovers, and require the R&D expenditures that companies like ATI and nVidia have to remain competitive?

I thought it was well established that the discreet graphics chip market (at least at this time) was rather unlike "most fabless semiconductor companies..."

That's nice. That's all the more reason to have a high gross margin! Gross margin is revenue minus cost of goods sold(manufacturing, not R&D)

I'd guess it really doesn't matter what part of the industry you're in, the investors are interested in ROI. 5% ROI isn't much to crow about, from an investment standpoint. INTC, for example, seems to make 15% ROI. SLAB makes 12%.

Guess what? they've all got a higher gross margin because its required to make money when you've high operating expenses from R&D, it only gets worse when you have a 6 month development cycle.

 

[Joe DeFuria]

I'm sure they do, but what does that have to do with anything? Why is this always ATI vs. NVIDIA to you?

It's not. 35% gross margins is good historically speaking, for this market segment. nVidia ("The Market Leader or at least next best competitor) was used as the example.

That's nice. I'd guess it really doesn't matter what part of the industry you're in, the investors are interested in ROI.

Yes, and they are also interested in growth. ATI is moving in the right direction. That is something to "crow about".

5% ROI isn't much to crow about, from an investment standpoint. INTC, for example, seems to make 15% ROI. SLAB makes 12%.

That's nice. Why is everything ATI vs. INTC and SLAB to you?

Guess what? they've all got a higher gross margin because its required to make money when you've high operating expenses from R&D, it only gets worse when you have a 6 month development cycle.

Um, that's my point.

The 6 month development cycle is required to be competitive in this particular market (at this time, at least.) This puts immense pressures on margins. Again, see nVidia. The fact that ATI is moving the right direction in all respects: margins, revenues, market share....in this competitive environment is definitely something to "crow" about.

 

[RussSchultz]

You replied prior to me editing my post.

The relevant edit was: gross margin is revenue minus cost of goods. Engineering does not enter this equation.

The 6 month cycle would demand a higher gross margin percentage, assuming 6 month cycle would mean increased engineeering.

 

[Joe DeFuria]

You replied prior to me editing my post.

The relevant edit was: gross margin is revenue minus cost of goods. Engineering does not enter this equation.

Actually, it does.

Because more time to engineer can lead to a lower cost of goods.

The 6 month cycle would demand a higher gross margin percentage, assuming 6 month cycle would mean increased engineeering.

The 6 month cycle also means maintaining a higher cost of goods. (which in turn demands a lower margin.) You don't get a lot of time to lower the cost of goods and maintain the same selling price, because you are constantly replacing your product line up.

 

[RussSchultz]

Well then, you must be right.

I'll be sure to tell my CEO that 35% gross margin is fantastic.