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   Technology StocksNVIDIA Corporation (NVDA)

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From: Sam11/15/2018 6:13:00 PM
   of 1662
Nvidia has a Pascal problem, and its stock is plunging after earnings
MARKETWATCH 5:54 PM ET 11/15/2018

Symbol Last Price Change
202.39 +5.49 (+2.78%)
QUOTES AS OF 04:05:45 PM ET 11/15/2018

Quarterly gaming sales lower than expected as Turing launches, Nvidia(NVDA) says it has too many Pascal-based cards in inventory

Nvidia Corp. (NVDA) shares plunged in the extended session Thursday after the chipmaker's earnings and outlook fell short of Wall Street estimates and a cratering in cryptocurrency sales helped build up an excess inventory of older gaming chips.

Nvidia (NVDA) shares plunged 18% after hours, following a 2.6% rise to close the regular session at $202.39. Nvidia(NVDA) shares had already declined 21.9% in the past three months, as the PHLX Semiconductor Index has declined 7.4% and the S&P 500 index dropped 4.1%.

"Gaming revenue was short of our expectations, and our fourth-quarter outlook is impacted by excess channel inventory of midrange Pascal products," Nvidia(NVDA) Chief Financial Officer Colette Kress said in a statement. "We believe this is a near-term issue that will be corrected in one to two quarters, and remain confident in our competitive position and market opportunities."

Gaming revenue rose 13% from a year ago to $1.76 billion, but that was way below the Wall Street consensus of $1.91 billion.

On the call, Kress said that the quarter "included a $57 million charge for prior architecture components and chips following the sharp falloff of crypto mining demand."

Ever since last year's peak in cryptocurrencies like bitcoin , more and more miners have sold off their mining rigs, meaning there has been a flood of second-hand Pascal gaming chips and gaming chips from companies like Advanced Micro Devices Inc. (AMD) on the market.

Nvidia (NVDA) explained that it is holding on to too many of its older-generation Pascal chips -- Pascal is the chip architecture that is being replaced by Nvidia's(NVDA) recently released Turing chip architecture for professionals (http:// gamers (

That wreaked havoc with Nvidia's(NVDA) forecast for the fourth quarter as it seeks to work down that inventory. The company called for revenue of $2.65 billion to $2.75 billion, while analysts on average had expected revenue of $3.4 billion.

For the third quarter, the company reported net income of $1.23 billion, or $1.97 a share, compared with $838 million, or $1.33 a share, in the year-ago period. On a fully adjusted basis, which strips out stock compensation, earnings were $1.84 a share. Analysts on average expected Nvidia(NVDA) to report GAAP earnings of $1.71 a share and adjusted earnings of $1.93 a share.

Revenue rose to $3.18 billion from $2.64 billion in the year-ago quarter. Wall Street expected revenue of $3.24 billion from Nvidia(NVDA).

Data-center sales rose 58% to $792 million, while the Street expected $819 million. Professional visualization sales rose 28% to $305 million against the Street's estimate of $282 million. Auto sales rose 19% to $172 million, while analysts expected, and OEM & IP revenue fell 23% to $148 million against the Street's $116 million estimate.

More: The Turing test has arrived for Nvidia(NVDA) ( arrived-2018-11-12)

Of the 35 analysts who cover Nvidia(NVDA), 24 have buy or overweight ratings, 10 have hold ratings and one has a sell rating, with an average price target of $285.94.

-Wallace Witkowski; 415-439-6400;

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To: Sam who wrote (1629)11/16/2018 7:51:52 AM
From: Lou Weed
   of 1662
Ouch - glad I didn't start a position in the upper 180s earlier this week. Will hold on for a few trading days to see what happens. I wonder if this is a canary in the coal mine for a lot more pain for the overall sector going forward? I keep hearing the term "stuffed channel" - sounds like a tariff related dynamic. Buckle up folks!


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From: JakeStraw11/16/2018 12:15:29 PM
   of 1662
What every major Wall Street analyst said after the chipmaker's earnings

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From: Glenn Petersen12/12/2018 7:16:44 PM
1 Recommendation   of 1662
After losing half its value, Nvidia faces reckoning

Danny Crichton @dannycrichton
December 12, 2018

Nvidia is a company that has reached the highest highs and the lowest lows, all in the span of a couple of weeks.

Over the past two months, Nvidia’s stock has dropped from a closing price of $289.36 on October 1 to today’s opening of $148.42, a decline of 48.8 percent.

It takes a lot for a company to lose nearly half its value in such a short period of time, but Nvidia is proving that an otherwise strong technology business can disappear in the blink of an eye. The company faces an almost perfect barrage of headwinds to its core products that is stalling its plans for long-term chip domination.

To step back a bit first though, Nvidia has traditionally made graphical processing units (GPUs) that are excellent at the kinds of parallel computation required for gaming and applications like computer-aided design (CAD). It’s a durable and repeatable business, and one that Nvidia has a commanding market share in.

Yet, these markets are also fairly narrow, and so Nvidia has endeavored over the past few years to expand its product offerings to encompass new applications like artificial intelligence / machine learning, autonomous automotive and crypto hashing. These applications all need strong parallelized processing, which Nvidia specializes in.

At least part of that story has worked well. Nvidia’s chips were extremely popular in the crypto run-up over the past few years, causing widespread shortages of the chips (and annoying its core gaming fans in the process).

This was huge for Nvidia. The company had revenues of $1.05 billion for the quarter ending October 31, 2013, and $1.31 billion two years later in 2015 — a fairly slow rate of growth as would be expected for a dominant player in a mature market. As the company expanded its horizons though, Nvidia engorged on growth in new applications like crypto, growing to $3.2 billion in revenue in its last reported quarter. As can be expected, the stock soared.

Now, Nvidia’s growth story is being hammered on multiple fronts. First and foremost, the huge sales of its chips into the crypto space have dried up as crypto prices have crashed in recent months. This is a pattern we are seeing with other companies, namely Bitmain, which has made specialized crypto chips a major part of its business but has lost an enormous amount of its momentum in the crypto bust. It announced it was shuttering its Israel office this week.

That bust is obvious in Nvidia’s revenues this year: they are essentially flat for three quarters now, hovering between $3.1 and $3.2 billion. Some have called this Nvidia’s “ crypto hangover.” But crypto is just one facet of the challenges that Nvidia faces.

When it comes to owning next-generation application workflows, Nvidia is facing robust competition from startups and established players who want access to this potentially gigantic market. Even its potential customers are competing with it. Facebook is reportedly designing its own chips, Apple has been doing so for years, Google has been in the game a while and Amazon is getting into the game fast. Nvidia has the know-how to compete, but these companies also understand the nuances of their applications really, really well. It’s a tough market position to be in.

If the challenges around applications weren’t enough, geopolitical tensions are also causing Nvidia serious harm. As Dan Strumpf and Wenxin Fan wrote in The Wall Street Journal two weeks ago in a deep dive, the company is emblematic of the challenge Silicon Valley firms face in the U.S. / China trade stand-off:

Nvidia executives are watching the trade fight with growing unease over whether it will curb its access to Chinese customers, according to a person familiar with the matter. Almost 20% of Nvidia’s $9.7 billion in revenue last year came from China. Many of its chips are used there for assembly into other products, and it has invested heavily to tap China’s burgeoning AI industries.

The company also is concerned that deteriorating relations between the world’s two biggest economies are causing Beijing to double down on efforts to reduce reliance on U.S. suppliers of key hardware such as chips by nurturing homegrown competitors, eating into Nvidia’s long-term business.

Crypto, customers and China. That’s how you lose half your company’s value in two months.

What’s next

Arman and I are still investigating the next-generation silicon space. Some good conversations the past few days with investors and supply-chain folks to learn more about this space. Nvidia’s analysis above is the tip of the iceberg. Have thoughts? Give me a ring:

This newsletter is written with the assistance of Arman Tabatabai from New York.

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To: Glenn Petersen who wrote (1632)12/12/2018 10:10:00 PM
From: rogermci®
   of 1662
For the most part, all of that bit of news already discounted in the price of the stock. As I've said before a lot of good stocks have taken 50% hits in price over the last few months and rightfully so. Softbank just announced they're unloading a sizable chunk of NVDA. Stock price did not budge. Facing a reckoning? I don't think so. Tell me something new I don't already know. Stock market crashing? It already has.

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From: JakeStraw12/13/2018 10:27:40 AM
   of 1662
NVIDIA Stock Looks Cheap. It's Probably Not.
The stars are no longer aligned for the graphics chip company.

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From: JakeStraw12/13/2018 10:29:24 AM
   of 1662
Add Nvidia to 'Christmas shopping list' as chip stocks carve out a bottom, Citi says

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From: JakeStraw1/28/2019 9:53:47 AM
1 Recommendation   of 1662
NVIDIA today updated its financial guidance for the fourth quarter of fiscal year 2019, reflecting weaker than forecasted sales of its Gaming and Datacenter platforms.
In Gaming, NVIDIA's previous fourth-quarter guidance had embedded a sequential decline due to excess mid-range channel inventory following the crypto-currency boom. The reduction in that inventory and its impact on the business have proceeded largely inline with management's expectations. However, deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs. In addition, sales of certain high-end GPUs using NVIDIA's new Turing™ architecture were lower than expected. These products deliver a revolutionary leap in performance and innovation with real-time ray tracing and AI, but some customers may have delayed their purchase while waiting for lower price points and further demonstrations of RTX technology in actual games.
In Datacenter, revenue also came in short of expectations. A number of deals in the company's forecast did not close in the last month of the quarter as customers shifted to a more cautious approach. Despite these near-term headwinds, NVIDIA has a large and expanding addressable market opportunity in AI and high performance computing, and the company believes its competitive position is intact.
"Q4 was an extraordinary, unusually turbulent, and disappointing quarter," said Jensen Huang, founder and CEO of NVIDIA. "Looking forward, we are confident in our strategies and growth drivers.
"The foundation of our business is strong and more evident than ever – the accelerated computing model NVIDIA pioneered is the best path forward to serve the world's insatiable computing needs. The markets we are creating – gaming, design, HPC, AI and autonomous vehicles – are important, growing and will be very large. We have excellent strategic positions in all of them," he said.
NVIDIA expects its GAAP and non-GAAP gross margin to be impacted by approximately $120 million in charges for excess DRAM and other components associated with the updated revenue guidance and current market conditions.
The company will provide Q4 fiscal 2019 financial results and Q1 fiscal 2020 guidance on its earnings call scheduled for Feb. 14.

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From: Glenn Petersen2/6/2019 10:36:37 AM
1 Recommendation   of 1662
SoftBank's investment fund dumps entire $3.6 billion stake in Nvidia
  • SoftBank's Vision Fund said it sold its entire stake in chipmaker Nvidia in January.
  • The position was valued at $3.6 billion as of December 31.
  • Nvidia cut its revenue guidance last week citing weakness in China.
Elizabeth Schulze | @eschulze9
Published 3 Hours Ago Updated 59 Mins Ago

Rick Wilking | Reuters
Jensen Huang, CEO of Nvidia, shows the NVIDIA Volta GPU computing platform at his keynote address at CES in Las Vegas, January 7, 2018.

Chipmaker Nvidia suffered another setback Wednesday after SoftBank's Vision Fund disclosed it had sold its entire stake, worth more than $3 billion, in the company in January.

In its third-quarter earnings release on Wednesday, SoftBank said its fund, which invests in technology ventures, had "disposed its entire holding of Nvidia shares." The position was valued at $3.63 billion as of December 31.

The disclosure is another blow for Silicon Valley-based Nvidia, which has seen its share price nearly slashed in half in the past four months. Last week, Nvidia cut its revenue guidance for the fiscal fourth quarter citing "deteriorating macroeconomic conditions, particularly in China."

Nvidia is part of a growing list of chip stocks warning about weakness in the world's second largest economy, as well as global demand for smartphones. In January, Apple issued a rare cut in its revenue guidance citing weak demand from Chinese consumers.

SoftBank's Vision Fund revealed its investment in Nvidia in May 2017. The Vision Fund, which is backed by investments from SoftBank as well as Saudi Arabia's sovereign wealth fund, launched in 2017 with more than $90 billion in capital. Its other investments include Uber Technologies, WeWork and British chip designer ARM.

SoftBank shares closed slightly higher on Wednesday after the firm reported a 60 percent rise in quarterly profits and a $5.5 billion share buyback program.

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From: Glenn Petersen2/15/2019 9:46:13 AM
1 Recommendation   of 1662
Nvidia jumps after beating on earnings and revenue
  • The company beat expectations on the top and bottom lines after providing updated guidance last month.
  • Nvidia's recent inventory issues appear to have worsened sentiment in the company supply chain.
Jordan Novet | @jordannovet
Published 18 Hours Ago Updated 13 Hours Ago

Shares of chipmaker Nvidia rose as much as 8 percent on Thursday after the company reported better-than-expected earnings for the fourth quarter of its 2019 fiscal year.

Here are the key numbers:
  • Earnings: 80 cents per share, excluding certain items, vs. 75 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $2.21 billion, vs. $2.20 billion as expected by analysts, according to Refinitiv.
Revenue was down 24 percent year over year in the quarter, which ended on Jan. 27, according to a statement.

Nvidia shares are up 15 percent since the beginning of the year, but in the past year the stock is down 36 percent.

"This was a turbulent close to what had been a great year," Nvidia CEO Jensen Huang said in the company's press release. "The combination of post-crypto excess channel inventory and recent deteriorating end-market conditions drove a disappointing quarter."

The company disclosed excess inventory one quarter ago. On Jan. 28, Nvidia released updated fiscal fourth-quarter guidance indicating that gaming and data center revenue were below the company's expectations.

"Hyperscale and cloud purchases declined both sequentially and year-on-year as several customers paused at the end of the year," Nvidia's chief financial officer, Colette Kress, said on a conference call with analysts on Thursday. "We believe the pause is temporary."

The largest cloud providers, like Amazon and Microsoft, already offer Nvidia graphics processing units (GPUs) that can be used to train artificial-intelligence models using lots of data. Now Nvidia is working closely with such companies on adoption of its GPUs for inference, a later stage in the AI process, Kress said.

Analysts from Raymond James said sentiment from the supply chain turned more negative.

"Gaming sales naturally continue to be impacted by the significant inventory overhang," the analysts wrote in a Jan. 28 note. "That inventory reduction has been impacted by slower sell-through, particularly in China."

In the fiscal fourth quarter Nvidia announced the availability of the GeForce RTX 2060 graphics card for PC gaming.

With respect to guidance, Nvidia said it's expecting $2.20 billion in revenue, plus or minus 2 percent, in the first quarter of its 2020 fiscal year. The midpoint is below the $2.28 billion Refinitiv estimate, and it would reflect a revenue decline of 31 percent.

The company believes fiscal year 2020 revenue will be "flat to down slightly." Analysts polled by Refinitiv were expecting a 7 percent revenue decline for that period. Kress said Nvidia expects the fiscal first quarter to be the bottom of the excess inventory issue for gaming GPUs.

Jim Kelleher, an analyst at Argus research, described Nvidia's situation as a "near-perfect storm," because of higher inventory, the launch of an expensive product and "a one-time runoff in crypto-related inventory." Kelleher has a buy rating on Nvidia.

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