There have been a lot of road-kills in the graphics business (Chips & Technologies, S3, Cirrus Logic, Tseng Labs come to mind), which is always cyclical, and "owned" by a player or two. For now, nVidia is one of the big two, and will continue to be - till the next major breakthrough in graphics processing creates a new winner (or a new old winner).

I had an opportunity to listen to nVidia's mea culpa conference call after announcing earnings that fell short, but weren't as bad as expected. While this is fine and dandy, it just seems too "perfect" to me, and I refuse to believe that the long-term effects of this admitted snafu will last only one quarter. Why am I being pessimistic ?

a. NVDA came in closer to the low-end of their own guidance of $875M to $950M in revenues (I'd have thought that they had an excellent idea by mid-July as to what they would probably announce).
b. I believe in the cockroach theory. If you see a roach, there are a 100 hundred below the floor-boards that you do not see.
c. In the semiconductor industry, even the best systems cannot stop the "propagation" of a mistake into other areas.
d. nVidia's cycle-time - from when they start designing a chip, to getting it fully qualified at Microsoft (to work with the OS and the graphics API) - to the time the company recognizes revenue from the product is anywhere from twelve to eighteen months (though occasionally, I have heard the company venture smaller numbers (which is possible for re-designs and incremental improvements).
e. The announcement of a stock buy-back means nothing. Implementation thereof is key (see Linear Tech in my previous article).

Let me be very clear that I believe in Jen-Hsun Huang and his resilience. In fact, NVDA has been through bankruptcy protection once and emerged triumphant (which very few semiconductor companies have done in the past).