Wednesday, December 7, 2016

BMO Capital On Potential Competition For NVIDIA (NVDA)

The stock finally set another new all-time high print today at $95.30, currently $95.06 +1.67.
The last AT high was Nov. 23, $95.25.

From Barron's Tech Trader Daily:

Nvidia’s Got the Mo, But Watch Those ASICs, Says BMO
BMO Capital chip analyst Ambrish Srivastava on Monday offered up an interesting assessment of how Nvidia (NVDA) and Intel (INTC) are doing in the market for big computing and machine learning — my apologies to readers for the delay in getting to it.

Looking through the report, Srivastava’s most interesting point is his caution that both chip companies could both be vulnerable to other kinds of chips, known as “application-specific integrated circuits.”

His summary of the two vendors comes from looking at what the “TOP500” supercomputers use, including both Nvidia’s GPU graphics chips and Intel’s “Xeon-Phi” processors.

“NVIDIA has done a great job in bringing HPC into the mainstream but Intel is not sitting idle and is responding,” is how Srivastava sums up this clash of titans.

In general, Intel and Nvidia have eaten up computing cycles by selling “accelerators” of one sort or another, which have replaced some of the work done by microprocessors:

Per the latest world’s TOP500 supercomputer list published in November 2016, roughly 24% of systems, and roughly 49% of the FLOPS (a common metric for compute processing power for supercomputers, as opposed to MIPS or millions of instructions per second, another common measure of compute power) are systems with GPU, Xeon Phi accelerators or other custom accelerators.
Srivastava goes through how Intel’s latest stacks up to Nvidia, and sees Nvidia striking back at recent gains by Intel with Nvidia’s newer “Pascal” chips:...MUCH MORE
"Nvidia Down 6% Post-Amazon AWS Show; Global Equities Sees GPU Payoff" (NVDA)
Here are the rest of our November posts, for the prior year-and-a-half use the 'search blog' box if interested:

"The Fuzzy Future of Virtual Reality and Augmented Reality" (NVDA; FB)
NVIDIA Builds Its Very Own Supercomputer, Enters The Top500 List At #28 (NVDA)
NVIDIA: Don't Buy the Stock For The Autonomous Car Stuff (or virtual reality) NVDA; TSLA; IBM
"Nvidia Drops 4% Even as Needham Ups to Buy" (NVDA)

The stock closed down almost 5% at $83.64 -4.33 (-4.92%). After Friday's 30% upmove we were bracing for as much as a 10% drop out of the chute. For folks new to this type of investing, high-tech at high multiples, the swings can be almost terrifying, especially now that it is not 'undiscovered'.
C'est la vie, c'est la guerre, c'est la pomme de terre.  
A Brief Interview With NVIDIA's CEO and Analysts React (NVDA)
NVIDIA: Jeffries, RBC Capital Markets; MKM Raise Price Targets, Stock Soars 22% (NVDA)
NVIDIA Beats On Top Line; Beats On Bottom Line; Raises Guidance, Stock Jumps 13% (NVDA)
NVIDIA: Ahead of Today's Earnings Report There Sure Is A Lot Of Happy Talk (NVDA)

Attentive reader may have noticed we haven't posted on the company in the run-up to today's numbers. Instead we end up in the very unfamiliar role of prude saying stuff such as this from October 25:
We continue to bet on one of the class acts of Silicon valley but investors have to know what  they have here and unless they are willing to ride a 20% down move to get to greater glory profits they should maybe go buy some T-bills...
And that's where we're at