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HEXUS.sharewatch: NVIDIA falls on PC graphics and tablet concerns

by Scott Bicheno on 16 May 2011, 13:03

Tags: NVIDIA (NASDAQ:NVDA)

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Graphics chip maker NVIDIA has always had one of the most volatile stocks on our list, probably due to its aggressive stances in highly competitive markets. This can lead to major swings in investor sentiment as big wins appear to be transformed into big challenges, and vice versa.

The picture is further complicated with NVIDIA by its straddling of two distinct, but converging, markets: PCs and mobile devices. Traditionally the biggest player in PC graphics, NVIDIA has seen its integrated graphics (IGP) business eradicated by the move by Intel and AMD to combine the CPU and the GPU.

Conversely NVIDIA initiated development on its own mobile SoC - Tegra - some years ago, and is only now starting to see some bottom-line reward for all that endeavour.

Eleven days ago NVIDIA responded to our reports of it losing PC graphics market share by stressing that this was mainly down to the phasing-out of its IGP operations and that it was still doing fine in discrete graphics. When NVIDIA reported its Q1 earnings late last Thursday, that position seemed to be vindicated by figures and forecasts that apparently exceeded analyst expectations.

But that doesn't seem to have been enough. Having crept up by around five percent over the course of last week, NVIDIA's shares fell by over ten percent in Friday trading, as investors lost their nerve over NVIDIA's position in both the PC and mobile markets. The former seems to be a delayed reaction to the previous week's news, while the latter hinges on concerns that Android Honeycomb tablets haven't been especially well received.

Company Listing Share price 24/4/11 Share price 2/5/11 Share price 8/5/11 Share price 16/5/11 7-day change Market cap (bn)
AMD AMD 8.71 9.10 8.92 8.90 -0.2% 6.12
Apple AAPL 350.70 350.13 346.66 340.50 -1.8% 313.70
ARM ARMH 31.03 31.46 29.27 28.51 -2.6% 12.79
Avnet AVT 34.85 36.32 36.41 37.21 2.2% 5.68
Cisco CSCO 16.94 17.52 17.56 16.88 -3.9% 93.31
Dell DELL 15.27 15.47 16.01 16.37 2.2% 31.21
Google GOOG 525.10 544.10 535.30 529.55 -1.1% 170.65
HP HPQ 40.99 40.37 40.81 40.41 -1.0% 87.44
IBM IBM 168.28 170.58 168.89 169.92 0.6% 207.22
Ingram Micro IM 20.91 18.73 18.84 18.78 -0.3% 3.02
Intel INTC 21.46 23.15 23.25 23.41 0.7% 124.12
Microsoft MSFT 25.52 25.92 25.87 25.03 -3.2% 211.07
Nokia NOK 8.63 9.23 8.44 8.54 1.2% 32.45
Nvidia NVDA 18.52 20.00 19.32 18.26 -5.5% 10.87
Oracle ORCL 34.75 35.96 34.87 35.19 0.9% 178.08
Qualcomm QCOM 56.94 57.09 56.57 57.12 1.0% 95.36
Tech Data TECD 52.51 53.13 51.84 53.04 2.3% 2.48
Dow .DJI 12505.99 12810.54 12638.74 12595.75 -0.3% N/A
FTSE 100 .FTSE 6018.30 6069.90 5976.77 5925.87 -0.9% N/A
NASDAQ .IXIC 2820.16 2873.54 2827.56 2828.47 0.0% N/A


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