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http://www.marketwatch.com/news/story/nvidias-picture-brighter-stock-price/story.aspx?guid=%7BB82E0D80-25BB-49F2-9BE3-A50EFD3E8CEC%7D
http://online.barrons.com/public/search/results.html?mod=b_hpp_header
THE OLD SAYING IS THAT A PICTURE IS WORTH 1,000 WORDS
. Given the length of this column, I'm thinking I could simply replace the whole thing with one picture. Wonder what would be the right one for the current market: the Grand Canyon? A bottomless pit? An image of me trying to ski down Outer Limits at Killington? Trust me, no one wants to see that.
Anyway, I've been thinking a lot about pictures lately, after a visit last week with Jen-Hsun Huang, CEO of graphics chip maker (NVDA:18.52,[size=0.8em]0.00,[size=0.8em]0.0%)
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(ticker: NVDA). Like many semiconductor companies this year, it's slid mightily. Having peaked just shy of $40 in October, its stock has since lost more than half its value, wiping out about $10 billion in market cap, finishing last week at $18.52. For the year to date, Nvidia is down 46%. The stock chart makes for a gruesome image.
There are several reasons for Nvidia's tumble. For one thing, the market is worried about the health of the PC sector. After a better-than-expected 2007, many fear that PC sales growth will shrink this year as the economy slows in the U.S. and Europe.
For Nvidia, the competitive landscape is also worrisome. The company has two primary rivals: ATI, which was acquired by (AMD: [size=0.8em]6.11,[size=0.8em]0.00,[size=0.8em]0.0%)s (AMD) for $5.4 billion in October 2006, and (INTC:[size=0.8em]21.75,[size=0.8em]0.00,[size=0.8em]0.0%)
(INTC), which includes basic graphics capability in its microprocessors and which is developing a discrete graphics chip code-named Larrabee which will compete with Nvidia's GeForce line and ATI's Radeon chips. ATI seems to have lost some momentum since it was acquired by AMD, which is working to combine the microprocessor and graphics chip into a single part. But Wall Street fears that ATI is due for a rebound -- while Larrabee looms as a threat in 2009 and beyond. (An aside: AMD now has a stock-market value of $3.7 billion, $1.7 billion less than what it paid for ATI. Amazing.)
I tend to think the market's worries about Nvidia are exaggerated. As Huang points out, Nvidia's target isn't the corporate desktop and notebook market at the core of Intel's business. Nvidia sells to people who think of computing as a visual activity: gamers, designers, architects, artists, animators, video editors. During our interview at Nvidia's Santa Clara campus, Huang pointed to the ThinkPad on which I've typed this column as exactly the kind of PC that Nvidia's chips don't address.
Nvidia simply isn't as exposed as Intel and AMD are to broader economic forces. And visual computing seems to be holding up better than business computing. The
(AAPL:[size=0.8em]133.27,[size=0.8em]0.00,[size=0.8em]0.0%)
(AAPL) Mac is flying off the shelves; the visual elements are what make the iPhone so compelling.(ADBE: [size=0.8em]34.45,[size=0.8em]0.00,[size=0.8em]0.0%)
(ADBE), which provides software tools for visual computing, last week reported better-than-expected earnings. GameStop, the No. 1 retailer of video games, is growing like crazy.
Meanwhile, Huang and his team are aggressively seeking to extend their graphics processors' reach. He contends that even low-end Intel microprocessors do a fine job on basic computing tasks like e-mail and creating documents. What changes the consumer experience, he contends, is more graphics power. Huang thinks people should trade off some microprocessor dollars and spend more on graphics. The result, he says, would be better gaming, quicker rendering of video images and an improved visual experience overall. That would give Nvidia a bigger slice of a PC's bill of materials.
Nvidia also thinks that there will be an increasing market for sophisticated graphics on hand-held devices. The company argues that GPUs (graphics processing units), with their "many core" architecture, can actually compete with CPUs (computer processing units) in some areas. Huang says that graphics processors are better suited to some computation-intensive tasks, like computational finance, astrophysics, biology and flow dynamics. In fact, he thinks Nvidia eventually can eat into one of Intel's key markets -- high-end servers -- as software developers take advantage of the "many-core" architecture. (Intel takes a multi-core approach, with two or four core processors; Nvidia graphics processors have as many as 240 cores.)
Is that too esoteric for you? Well, then think about this. Nvidia this year grew its top line 34%; in Q4, revenue was up 37%. Estimates for the January 2009 fiscal year call for Nvidia to report $4.8 billion in revenue and profits of $1.69 a share. For 2010, the consensus is $5.2 billion and $1.86. At last week's close, Nvidia had a market value of $10.5 billion. In other words, NVDA is trading at a modest 2.2 times current-year revenue, and just 11 times earnings. Barring a dramatic collapse in PC demand, it's hard to picture a cheaper play on the rise of visual computing. |
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发表于 2008-3-24 17:27
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