NVDA a bit overdone?

B

brettdoyle

I've been keeping an eye on NVDA... it got a haircut because of an analyst downgrade and the selloff seems to be a bit overdone. ATI doesn't seem to have any products lined up that are very good and AMD is bleeding money left and right and will likely be forced to cut R&D funding.

Tech stocks and computer parts makers like HP and MSFT have been running great. And people will find a way to pay money for video games even if we go into another great depression... they're just too addicting. I think the fundamentals are excellent.

At 32.75 this seems to be a good place so start a position so I'm in for 200 shares... but if this goes down to say $31.00 I definitely think it would be a good idea to buy hand over fist.

Thoughts?
 
From an article in this weeks Barrons.

Nvidia (NVDA), the maker of graphics-centric microprocessors, has been a huge beneficiary of the digital-imaging revolution in computers, gadgets and wireless handsets. One bearish hedge-fund manager warns that all good things must come to an end for this stock, which last week was trading near 35, or 53.6 times trailing earnings. While the December quarter will still be strong, the manager predicts '08 will not be kind to Nvidia investors. Changes in component sourcing by Intel and Advanced Micro Devices mean Nvidia will lose share next year and see a drop in growth. The fund manager thinks the shares could fall up to 50%.
 
Quote from Anekdoten:

From an article in this weeks Barrons.

Nvidia (NVDA), the maker of graphics-centric microprocessors, has been a huge beneficiary of the digital-imaging revolution in computers, gadgets and wireless handsets. One bearish hedge-fund manager warns that all good things must come to an end for this stock, which last week was trading near 35, or 53.6 times trailing earnings. While the December quarter will still be strong, the manager predicts '08 will not be kind to Nvidia investors. Changes in component sourcing by Intel and Advanced Micro Devices mean Nvidia will lose share next year and see a drop in growth. The fund manager thinks the shares could fall up to 50%.
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That guy is a moron, I don't know any other way to say it. Nvidia doesn't even compete with Intel. Intel makes super low end graphics cards that are "good enough" to run windows for $15 a piece whereas Nvidia competes in a whole different market segment that sells high end cards for games upwards of $800.

AMD essentially ruined ATI. They're losing money like crazy and their products aren't competitive. AMD is a $12 stock with a -4 EPS, they could potentially go bankrupt. If anything, Nvidia has a monopoly on the high end graphics market.

I don't deny that 08 could possibly be a bad year since that's just hard to predict, but after looking at the numbers from other computer parts makers like dell, microsoft, hp, apple, etc... it appears that this is going to be a good xmas season.
 
I rarely have an opinion on fundamentals just posted it for those that do care.

As far as technicals a reversal formation on the daily/weekly trendline would be nice, otherwise it's catching the falling knife.

Anek
 
I think alot of ppl will upgrade their graphics cards pretty soon because of the highly anticipated game cryisis which has awesome graphics but needs a high-end graphics card and I really mean High-end. I think many ppl were waiting for this game to buy a new card and NVDA currently kicks ATI's butt at least at the high end.

Today NVDA just started selling the 8800GT which is reasonably priced and has a good performance even for the game crysis from what I've seen. (some benchmarks are out)

So overall I think NVDA will sell a decent amount of cards in Q4 and 1Q '07. Now I don't know if thats already priced in but the stock had a nice pullback.
 
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