Join        Login             Stock Quote

Nvidia (NVDA) Offers Positive Risk-Reward, Set To Benefit From Windows On ARM Space

 June 12, 2012 09:41 AM

(By Mani) Graphics chip maker Nvidia, Inc. (NASDAQ:NVDA) offers attractive risk-reward with the recent share pullback, and is set for an emerging lead role for the Windows-on-ARM camp, while its Kepler GPU product cycle is witnessing resilient attach rates.

At the recently concluded Computex, Nvidia was the sole Windows on ARM processor supplier to demo an OEM branded tablet from Asus, which would solidify its non-Apple tablet leadership position in the ARM camp.

"While we expect a modest 3 pct decline in 2012 discrete graphics attach rates, our checks show likely resilience resulting from the use of Nvidia's Kepler discrete graphics family in larger screen ultrabooks, limiting downside risk of sharper attach rate declines," UBS analyst Uche Orji said in a note to clients.

[Related -NVIDIA Corporation (NVDA) Q3 Earnings Preview: Can We See Another Beat?]

California-based Nvidia remains dominant Professional Solutions business, which enabled the company to continue to invest in its Tegra apps processors. The professional solutions business accounts for 70 percent of Nvidia's operating profit and should continue its growth trajectory, driven by graphics with Adobe CS6 and cloud initiatives that could expand its market for gaming and enterprise graphics.

Meanwhile, Nvidia should need to boost its market share in growing markets as Kepler GPU share gains could offset the threat of weaker than expected PC demand in 2012. However, the positive development is that past investments are beginning to materialize in the form of rapidly emerging customer engagements which could result in market-share gains across each respective segment.

[Related -Nvidia Corporation: Ramping Tegra 4 In 2H May Compress Current Gross Margins]

On the Enterprise side, Nvidia is seeking to establish and rapidly grow its presence with a VGX solution, essentially a VDI accelerator, optimal in supporting the rising demand for graphics applications.

Meanwhile, the company's total available market (TAM) on the consumer front grew from 100 million to 1.2 billion users, as a result of movement to gaming-as-a-service, supported by GeForce Grid, in which virtualization capabilities allow for a console-free low-latency remote display experience.

On the gross margin front, supply is improving as yields are trending far better than the prior 40nm generation. The early yield issues at Nvidia could position the company for a faster recovery than most suspect. The nature of wafer-based pricing through this dynamic should result in an uplift to gross margins should yields exceed targets.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

article imageThe Single Best Place To Invest Your Money For Retirement

It was never supposed to be this daunting. At least that's what we were read on...

article imageNegative Blowback From Negative Interest Rates

The Federal Reserve is widely expected to leave interest rates unchanged today. But perhaps standing pat read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.