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Nvidia bad financial forecast

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July 3, 2008 4:21:16 PM

From CNN Money

"Nvidia (NVDA) shares slumped almost 30% in early trade after warning late Wednesday that current-quarter sales won't meet forecasts due to slower global demand. The graphics chipmaker also said its gross margin - a key measure of profitability - won't meet forecasts."

http://money.cnn.com/2008/07/03/markets/markets_newyork...

The tables have turned.
a b Î Nvidia
July 3, 2008 4:46:56 PM

Scary. I especially hate the part about those nice SLI motherboards having defects. Oh well, we all knew already that Intel's chipsets are better than nVidia's. I guess sales of X38/X48 and HD 4850/4870 will go up after this.
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July 3, 2008 4:55:33 PM

welcome to the global recession
July 3, 2008 4:56:15 PM

yeah nvidia is getting killed in the low end market by ati's new cards and in the high end market no ones buying because the no one wants to put up with the problems of sli or buy a 600 dollar card that barely beats ati's cards.
July 3, 2008 5:03:03 PM

well the problems ATI had forced them to produce better and more affordable procucts to compete. Maybe this will give Nvidia a wakeup call.
July 3, 2008 5:03:55 PM

maximiza said:
welcome to the global recession



I agree that is has more to do with the recession and the flaky market right now. Of course having problems with your product line does not help. Just look what it did to AMD. If the market were much stronger I don't think you would see such a huge drop in Nvidia stocks. Just look at what is happening to GM and other large companies.

The price of oil seems to be the only good investment at this time.
July 3, 2008 5:06:54 PM

caamsa said:
.............The price of oil seems to be the only good investment at this time.


UUUHHHHHH? i dont know. Maybe a year ago oil would been a great investment, but it looks like bubble. remember what happened to the dot com and housing bubbles. When this oil buble collapses, it is gonna hurt.


Yeah, nvidia picked the wrong economy to sell $600 cards.
July 3, 2008 5:17:50 PM

The pricing is out of wack for it to be a big mover @ 600. They are gonna have to drop the pricies.
a b Î Nvidia
July 3, 2008 5:18:13 PM

When the Internet bubble collapsed, people moved money into real estate. So we ended up with a housing bubble. When that burst, money moved into commodities, and we have an oil bubble. Sooner or later that will burst too. I wonder where the money will go - tulips, Internet stocks, something totally new, biotech?
July 3, 2008 5:19:26 PM

50bmg said:
UUUHHHHHH? i dont know. Maybe a year ago oil would been a great investment, but it looks like bubble. remember what happened to the dot com and housing bubbles. When this oil buble collapses, it is gonna hurt.


Yeah, nvidia picked the wrong economy to sell $600 cards.




That didn't come out quite the way I intended. Every thing has its limits. Right now oil is king. Not sure if we are going to hit a bubble any time soon with world demand for oil at an all time high and demand going up quicker than supply and then factor in the volatile nature of the middle east and it may just explode right in our faces.
a b Î Nvidia
July 3, 2008 5:22:46 PM

I can't believe nobody's found a good alternative for oil yet. Everybody knew it was needed since around 1974. What's taking them so long???
July 3, 2008 5:25:30 PM

I heard corn is gold
July 3, 2008 5:26:27 PM

just look at brazil, they are mostly independent of oil....with their sugarcane ethanol... as the prices of oil goes up and up....they live their lives jes like before. good game america.

i wish sometimes our country could use sources of renewable energy like brazil. unlike the failure of corn ethanol. -_- gg.
July 3, 2008 5:41:26 PM

aevm said:
I can't believe nobody's found a good alternative for oil yet. Everybody knew it was needed since around 1974. What's taking them so long???


I've been an investor in the oil market for over 30 years and I can say that the main problems have been the government, followed by public perceptions that the news media has fostered on the gullible public. At least that applies for why its taking so long. As for alternatives, there are few practical ones. Electric cars and hydrogen powered cars have a load of problems, and airplanes have to have oil based jet fuel. But the government here in the US has been the biggest problem, telling oil/energy companies what they can or, most usually, cannot do, rather than letting the oil/energy companies work freely to develop better and cheaper ways of making energy.
July 3, 2008 5:42:40 PM

aznguy0028 said:
just look at brazil, they are mostly independent of oil....with their sugarcane ethanol... as the prices of oil goes up and up....they live their lives jes like before. good game america.

i wish sometimes our country could use sources of renewable energy like brazil. unlike the failure of corn ethanol. -_- gg.


Brazil has 1/10 the population and 1/50 of cars on the road that the US has. The US can't make enough ethanol to run every car. Dont get me wrong, we need ethanol, but we need hydrogen, bio-diesel, hybrids, electric cars as well.

Honda's Clariy fuel cell hydrogen cars are very nice and i read yesterday that Tesla will be manufacturing an electric 4 door sedan to go along with its 2 seater sports car.

This topic has veered off topic. LOL.

Nvidia's trouble will problably start a serious price war. Although Nvidias margins are not that good. They may not be able to drop the price to much because of the price of the large gpu die.
July 3, 2008 5:43:37 PM

I started reading this thread and then I was like wow that got off topic but since it did I felt like chiming in.

As for Ethanol there isn't enough land in the US to produce enough corn to go all Ethanol and Brazil isn't the only country that's gotten off oil, Greenland (or Iceland I can't remember which) gets 95% of it's energy from geothermal. The energy problem in the US isn't going to be solved by one alternative alone but as long as big oil is the largest lobby in Washington and the largest contributor to the Republican party change will be slow. Plenty of other countries are using wind, wave, hydro electric, sun and geothermal among other things that a good combination of all these would solve most of our energy problems. The aggravating thing is that the technology exists and is in use but everyone is making so much money that there isn't any incentive to change.
July 3, 2008 5:45:17 PM

sailer said:
................. rather than letting the oil/energy companies work freely to develop better and cheaper ways of making energy.


LOL. After 10 billion a quarter profits per oil company, they have all the permission they need to spend some of that on R&D.
July 3, 2008 5:47:52 PM

ausch30 said:
..............The aggravating thing is that the technology exists and is in use but everyone is making so much money that there isn't any incentive to change.


I agree. With these high gas prices, that will change. slowly, but already companies like Tesla are making the first steps. I doubt Tesla will be the answer, but someone has to take the first step.
July 3, 2008 5:53:43 PM

50bmg said:
I agree. With these high gas prices, that will change. slowly, but already companies like Tesla are making the first steps. I doubt Tesla will be the answer, but someone has to take the first step.


The first Air Bus A380 was sold to a Saudi Prince as his personal jet so everyone in the oil business is making more money than ever and that can buy a lot of suppression of emerging technologies.
July 3, 2008 5:54:32 PM

aevm said:
I can't believe nobody's found a good alternative for oil yet. Everybody knew it was needed since around 1974. What's taking them so long???

Guess who likes to buy up alternative energy patents and sit on them until oil isn't profitable anymore?
July 3, 2008 6:00:54 PM

Quote:
Brazil has 1/10 the population and 1/50 of cars on the road that the US has.


Well, actually, our (Brazil) estimated population is something around 184 millions of habitants, while that of the USA is around 304 millions. Cars in Brazil: around 40 millions. Cars in the USA: around 220 millions. Where did you get those numbers? LOL.

Nvidia is taking a well-deserved beating, anyway. 30% drop in stock last time I checked.
July 3, 2008 6:06:14 PM

50bmg- Actually, they do need permission from the government to spend money on R&D. For example, if Exxon-Mobil wants to develop a new line of batteries for electric cars, the government gets into it and stops them because of fears that doing so would turn them into a monopoly or something. And if they want to build a new, more efficient refinery, they get prevented by others who claim "environmental" concerns. The problems are massive, and too great to be covered here. As for the profits, the news media likes to paint the oil companies as some evil entities, but they are really owned by stockholders such as myself and they have a duty to their stock holders to make a profit. And the 10 billion profit per quarter, try thinking about the return on the investment and you find its not that much. Even a small change, such as a penny or two less charged per gallon of gas sold, could wipe that profit out instantly.

Back to Nvidia's problems, they have been there for quite some time, only buried under Nvidia hype or fanboyism, or both. Nvidia still either won't or can't support DX10.1. When MS first designed DX10, it included the 10.1 standard, but Nvidia claimed it was impossible to achieve, so MS downgraded DX10 to please Nvidia. Even now, Nvidia still refuses to make cards that support DX10.1, but AMD/ATI has been making cards that include the DX10.1 standard, proving that it isn't impossible to do. I've got Nvidia cards in two of my computers and I built my third one with an ATI card to get DX10.1 and intend to buy a 4870 as soon as they get a better supply in place. Nvidia's motherboard problems have been around for quite awhile as well. I think Nvidia needs to get off its mountain and start dealing with what it doesn't do, rather than continuing to put down ATI and its problems.
July 3, 2008 6:17:08 PM

Nvidia spends a lot of money on The Way It's Meant To Be Played and getting their logo on every box and every game intro, I remember the first time I started Crysis and there were ads for Nvidia and Intel and I just laughed. Nvidia is doing the same thing Intel did during the P4 years when AMD had a superior product but Intel flooded the market with ads so the average consumer would have brand recognition. Nvidia has big problems like the fact that they haven't come out with a completely new chipset in a year and a half and the one they've been reusing still has issues they haven't been able to resolve. They are producing big, hot, power hungry GPU's which cost so much to produce that they have to price them high. I really think that if AMD/ATI keeps going down the path they are currently on then in a year or so Nvidia will be in big trouble.
July 3, 2008 7:05:08 PM

Brazil: I was just trying to make a point. Brazil is smaller thus it is easier to convert from gas to ethanol. You made the same point.

Oil co. investment: Funny, the oil companies lobby enough to get what they want, so why can't they lobby to spend their money on R&D. Answer; they dont want to spend money on R&D. They want to keep up dependent on oil to rape us. I forgpot the oil companies are victims of the high price of oil.

Dont drink the kooaid.
July 3, 2008 7:32:03 PM

50bmg said:
Brazil: I was just trying to make a point. Brazil is smaller thus it is easier to convert from gas to ethanol. You made the same point.

Oil co. investment: Funny, the oil companies lobby enough to get what they want, so why can't they lobby to spend their money on R&D. Answer; they dont want to spend money on R&D. They want to keep up dependent on oil to rape us. I forgpot the oil companies are victims of the high price of oil.

Dont drink the kooaid.


Yeah, I got your point. It's true. However, 1/10 and 1/50 were quite ridiculous. I guess you are right about everything else.
a b Î Nvidia
July 3, 2008 7:44:13 PM

So, back on topic. Is this a good time to buy shares of either AMD or nVidia?
July 3, 2008 7:50:59 PM

aevm said:
So, back on topic. Is this a good time to buy shares of either AMD or nVidia?


I was just about to ask the same thing. Probably a good time to buy Nvidia shares.
a b Î Nvidia
July 3, 2008 7:56:08 PM

I'm tempted... When the recession goes away and nVidia starts using the 55nm process, they should have some good sales again. They're not far from 55nm, they even promised it for a new 9800GTX+ soon.
July 3, 2008 8:40:50 PM

As far as Nvidia will have some work to catch up as far as competitive prices. They sat two generations of graphics cards high and mighty. Putting thier logo on everything. Ever since 3xxx series I had a felling ATI/AMD taking action and making risks that now you see the results :) . since they were behind they knew they had to price competively from 3xxx series and up.
Anonymous
July 3, 2008 10:38:50 PM

^? maybe? maybe not? lol probably not... they are dropping now... if anything you want to sell nvidia now and not lose to much and buy AMD... and when the tables start to flip again... sell AMD buy nvidia...

thats all there is to it in my opinion... maybe there's a lot more to market shares then i'm understanding so please enlighten me :) 
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