NVIDIA shows signs ... [2008 - 2017]

[Carl B]

This is a very real issue though for NV going forward - the market gains AMD is likely to make this gen - besides eating into NV's volumes and margins - will work to reduce their mindshare ahead of Larrabee. Plus we all know when gamer sentiment shifts from one company to the other, it sort of stays there as a default until the other side offers compelling... not just similar... reason to change in the new gens. For myself, hell I've never owned an ATI card (though I've bought some as gifts); but I will this year.

Not only that but this whole defect-charge related issue speaks to an obviously deteriorating situation in the laptop space, where vendors may want to wait a while to see if the problems are remedied. That, or NV cuts into their margins further in order to incentivize, but point being come the quarterly results I wouldn't be surprised by substantial fiscal year downward profit revisions. And since that news has the potential to 'surprise' investors all over again, in terms of the stock there may be more downside to come.

I did buy some AMD today though on the sympathy sell-off, even though I think there's risk there of a further drop over the next couple of weeks due to the general chip malaise. Still with expectations for them already so low in the financial community, I'm hoping these quarter results will show a positive surprise, in part premised on NV's market retreat and AMD winning back some desktop CPU share from Intel in spite of itself. I'm also hoping for some news on their fab-lite strategy, as whether material or not that would be a boost for the shares.

 

[Geo]

Not only that but this whole defect-charge related issue speaks to an obviously deteriorating situation in the laptop space, where vendors may want to wait a while to see if the problems are remedied.

ATI was the great notebook champ for many years. It's only been the last 2.5 years that Nvidia's notebook market absolutely exploded, in part due to power advantages starting with the R5/G7 generations, and then ATI being bought by AMD making a close relationship on laptops with Intel pretty dicey for ATI. I have a feeling that ramping up production in that area considerably from their historical averages is what bit nvidia. Lappies are a different breed with much tighter production tolerances.

Edit: The release says "previous generation", which I'd guess in this context is the G7x line. One thing about laptops, is my impression is people are much more likely to buy extended warranties for them than desktops, increasing your exposure to down-the-line warranty repair costs.

 

[WaltC]

Right

They are hurting no doubt, but that is in comparison to their previous position. It would have been hard to go anywhere but down after the last year.

Yes, I hate to think where nV would be had ATi not essentially taken so much time off in the last year reorganizing and reorienting with AMD...(ouch!)... I think the 4800 series must at last put to bed all doubt about the ultimate fruit of the AMD/ATi union. Perhaps we can at last dispense with the "rotten fruit" metaphors of the last year, too...

 

[neliz]

31% already. shares drop faster than the price of the graphics cards. ($12.49)

 

[Carl B]

Well, that 31% was more or less instant - it's been trading at around ~28% down all day, and remember that the normal markets are closed now, so any trading you're seeing currently is after-hours. It opened today at $12.40 and closed at $12.49, so what you saw at the beginning is sort of what you got at the end. For reference yesterday's close was $18.03.

I was tempted by the stock a couple of times myself today truth be told, just because I could envision a significant bounce on Monday. But NVidia's just too volatile a play for me given that I'd more or less be gambling for that bounce, not having a high-confidence level for their ability to spin the future earnings reduction announcement into something positive. I do wish everyone getting in the best of luck though; NV's always a stock where there's a lot of money to be made or lost in extremely abbreviated amounts of time.

 

[Geo]

I think the dynamics of a short trading day today and a long holiday weekend would make gambling for a bounce on Monday even more dicey.

 

[dizietsma]

Yeah but the stock market knows nothing.

Just days after the first big warning of the subprime mess was announced by Merrill Lunch the market went up to 14k

How dozy was that?

Now they have gone the opposite way on nvidia. General motors went up by 1.4%, a company on the verge of bankruptcy it has been reported. No way is nvidia in those straights.

Headless chickens

Meanwhile, back on the 27th Feb I advised a friend to buy Intel due to their ability to profit from a weak dollar compared to a strong Euro and also their upcoming product lineup. He's only made a dollar per share up to now but in the present day 5% in 3 months is not bad. With more to come I feel.

 

[Carl B]

Now they have gone the opposite way on nvidia. General motors went up by 1.4%, a company on the verge of bankruptcy it has been reported. No way is nvidia in those straights

GM hit a 54-year low yesterday. Today they are up 1.4%. Context.

No one is rewarding GM in the larger picture, believe me.

 

[Rangers]

Yeah but the stock market knows nothing.

Just days after the first big warning of the subprime mess was announced by Merrill Lunch the market went up to 14k

How dozy was that?

Now they have gone the opposite way on nvidia. General motors went up by 1.4%, a company on the verge of bankruptcy it has been reported. No way is nvidia in those straights.

Headless chickens

Meanwhile, back on the 27th Feb I advised a friend to buy Intel due to their ability to profit from a weak dollar compared to a strong Euro and also their upcoming product lineup. He's only made a dollar per share up to now but in the present day 5% in 3 months is not bad. With more to come I feel.

Unless you are in oil..a guy I know got in at 110 what, 2-3 months ago? So he's up like 30% in 3 months.

 

[Voltron]

ATI was the great notebook champ for many years. It's only been the last 2.5 years that Nvidia's notebook market absolutely exploded, in part due to power advantages starting with the R5/G7 generations, and then ATI being bought by AMD making a close relationship on laptops with Intel pretty dicey for ATI. I have a feeling that ramping up production in that area considerably from their historical averages is what bit nvidia. Lappies are a different breed with much tighter production tolerances.

Edit: The release says "previous generation", which I'd guess in this context is the G7x line. One thing about laptops, is my impression is people are much more likely to buy extended warranties for them than desktops, increasing your exposure to down-the-line warranty repair costs.

That they are investigating potential insurance coverage perhaps says the fault may not necessarily lie with them. I'm not sure insurance would cover poor engineering, but it might cover in this case a material that did not conform to supplier promises. Just a guess. And from the wording of the press release it sounds like they want to make right with the OEMs regardless of warranties on account of the widespread nature of the situation.

 

[Sxotty]

That they are investigating potential insurance coverage perhaps says the fault may not necessarily lie with them. I'm not sure insurance would cover poor engineering, but it might cover in this case a material that did not conform to supplier promises. Just a guess. And from the wording of the press release it sounds like they want to make right with the OEMs regardless of warranties on account of the widespread nature of the situation.

Perhaps it is like the xbox thing and heatsinks were messed up.

 

[trinibwoy]

Those $20 Jan 09 calls look mighty tempting right now......

 

[_xxx_]

Does ATI actually make any wins with their new lineup? I'd rather guess that they're sacrificing margins to get a bigger chunk of the market.

 

[neliz]

Does ATI actually make any wins with their new lineup? I'd rather guess that they're sacrificing margins to get a bigger chunk of the market.

On discrete maybe not, but nVidia seems to lose the mobile marketshare just as fast as they gained it.

 

[Carl B]

Those $20 Jan 09 calls look mighty tempting right now......

For $0.50, you may be right. I guess the gamble there is to anticipate a) how strong NV's back-to-school through holiday sales will be and b) whether the market will price accordingly (or better).

 

[Geo]

I guess the gamble there is to anticipate a) how strong NV's back-to-school through holiday sales will be

Look at the calendar and the size of GT200, and those dual-slot GTX260s and tell me how you think they're going to do in back-to-school, which is primarily an OEM-driven cycle. They'll have to compete with the previous generation there primarily, methinks. Tho the "checkbox war" isn't as intense right now so they won't necessarily get utterly routed there even with G9.

Nonetheless, it'll be at least the holiday market before they can begin a strong recovery, at the soonest, methinks.

 

[INKster]

Look at the calendar and the size of GT200, and those dual-slot GTX260s and tell me how you think they're going to do in back-to-school, which is primarily an OEM-driven cycle. They'll have to compete with the previous generation there primarily, methinks. Tho the "checkbox war" isn't as intense right now so they won't necessarily get utterly routed there even with G9.

Nonetheless, it'll be at least the holiday market before they can begin a strong recovery, at the soonest, methinks.

Back to "private" school, you mean...
That kind of price structure, at a time when consumers are weary of large investments for short term uses like high-end video cards, is not exactly OEM-large volume material, neither is the HD4870 X2, for that matter.

If anything, the back to school season will be dominated by HD4850 and G92b (possibly the 9800 GT variant) at the top, followed by G94, RV670, etc.
Speedy GDDR5 RV770's and GT200 high end cards will have little effect overall.

 

[Carl B]

And significantly, the back-to-school time is a very high-volume laptop season. It should be noted that some folk eschew the desktop entirely when purchasing a school-bound PC. In an environment where NV might truly be squeezed on the mobile front, that trend would further favor AMD if their footprint in that segment of the market is considerably larger.

 

[Freak'n Big Panda]

yeah the vast majority of students at my university just have laptops for school. I would guess it is about 70-80% laptops.

 

[digitalwanderer]

Ah, so THAT'S why the notebook market is so important.

I'm horribly desktop-centric I've discovered lately.