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Facebook’s Oculus Rift Unveiled: Texas Instruments, Cypress Inside

Wall Street largely yawned Thursday after an iFixit teardown showed that Facebook ( FB )-owned Oculus Rift totes chips from STMicroelectronics ( STM ), Texas Instruments ( TXN ) and Cypress Semiconductor ( CY ). In afternoon trading on the stock market today , STMicroelectronics stock was up 1%, but shares of Texas Instruments and Cypress were down 1%. Shares of graphics chipmakers Nvidia ( NVDA ) and Advanced Micro Devices ( AMD ) were both down a fraction. Their GPUs (graphics processing units) are recommended for installation in PCs running the Rift headset. Oculus’ virtual reality headset has been in development for four years, according to iFixit, which also dismantled two earlier developmental versions. Facebook acquired Oculus in July 2014 for $2 billion. The Rift was finally unveiled March 28. On Wednesday, iFixit’s teardown sent shares of Cypress and Texas Instruments up as much as 5.8% and 2.4%, with both ending the day up about 1.6%. Cypress supplies a hub controller, which allows multiple USB-connected devices to be plugged in at once. Texas Instruments’ input comes in the form of an LED driver, which controls for image brightness and grayscale. STMicroelectronics supplied the Rift with an ARM-based microcontroller. But STMicroelectronics stock fell 1.1% Wednesday. Shares of Advanced Micro Devices and Nvidia flew as much as 4.2% and 2.4% Wednesday, before closing flat and up 1.1%, respectively. Image provided by Shutterstock .

Tesla Partner Nvidia Delves Into AI With Facebook, Alibaba

Tesla ( TSLA ) partner Nvidia ( NVDA ) forged alliances during Q4 with Facebook ( FB ) and Chinese Internet major  Alibaba ( BABA ) for speedy artificial intelligence chips, Nvidia CFO Colette Kress said late Wednesday on the chipmaker’s earnings conference call. And tech giants Alphabet ( GOOGL ), Microsoft ( MSFT ) and IBM ( IBM ) also are eyeing AI, she said. The arena pits graphics processing units, made by Nvidia and others, against another type of chip called field programmable gate arrays (FPGAs), to power the process. The trend — accelerated machine learning — is good news for GPU-maker Nvidia and Intel ( INTC ), which completed its acquisition of FPGA-maker Altera in December. Fostering AI requires breakneck speed in the data center. Nvidia stock rocketed as much as 12% Thursday, touching a six-week high near 31. Midday on the stock market today , Nvidia stock was up 9%, following Nvidia’s blowout Q4 earnings and its guidance leap. For its fiscal Q4 ended Jan. 31, Nvidia reported 35 cents earnings per share on a record $1.4 billion in sales, flat and up 12%, respectively, vs. the year-earlier quarter, and topping Wall Street expectations. Fiscal 2016 ended with $5.01 billion in sales and $1.08 EPS, up a respective 7% and 4%, to beat the consensus model of 29 analysts polled by Thomson Reuters. Nvidia guided above the consensus to $1.26 billion in sales, plus or minus 2%, for the current quarter. That would be up 9.5% year over year, but down 10% sequentially — a measure Rosenblatt analyst Kinngai Chan, in a research note, called “prudent and appropriate.” Chan sees weak China and Asia gaming demand slugging Nvidia in the first half of fiscal 2017. But gaming was the bright spot for Nvidia’s Q4, where sales flew 25% year over year to $810 million. GPU sales, Nvidia’s bread and butter, rose 10% to $1.18 billion. Nvidia Vs. AMD Pretty Close In the second half of the year, Nvidia could outperform after releasing its newest GPU generation, Pascal, says Chan. “We do not foresee any meaningful market share shifts and continue to see a benign pricing environment,” Chan wrote. Likewise, Pacific Crest analyst Michael McConnell doesn’t expect any major shifts in share between Nvidia and GPU rival Advanced Micro Devices ( AMD ). Both are deeply entrenched in the gaming world — Facebook-owned Oculus recommends GPUs from either to power its upcoming Rift VR games. “We believe further stock outperformance this year will hinge on company progress with PC GPU total addressable market expansion (VR) … given our belief that GPU share gains vs. Advanced Micro Devices have likely peaked,” McConnell wrote in a research note. He has a sector weigh rating on Nvidia stock. Automotive and data center sales remain healthy growth drivers for Nvidia — up 68% and 10% year over year, respectively — but they only comprise about 13%-14% of total sales, McConnell wrote. Sales stemming from Tesla and Nvidia’s joint accelerator chips are included in the data center total. Nvidia CEO Jen Hsun-Huang sees that as a potential boom market. During Q4, Nvidia announced a hyperscale data center platform that accelerates machine learning (AI). He sees the move to AI as “a brand new computing model.” “There are so many problems that computer science has been trying to solve, which algorithmically are just impossible to solve,” he told analysts on Wednesday’s call. “Using an enormous amount of data to train a neural net … is a pretty exciting computation model.”

Tesla Partner Nvidia Shatters Sales Records, Tops Q1 Views

Shares of Tesla Motors ( TSLA ) partner Nvidia ( NVDA ) rocketed in after-hours trading Wednesday, after the graphics processing unit-maker toppled Wall Street’s fiscal Q4 and 2016 views, and guided to fiscal Q1 sales vastly above consensus views. Nvidia stock was up nearly 8% in extended trading Wednesday, after releasing its financial results, after rising 2.5% in the regular session, to 27.66. Nvidia stock hit an eight-year high near 34 at the end of 2015, before the stock market’s rough start to 2016. For its fiscal Q4 Jan. 31, Nvidia reported a record $1.4 billion in sales, as well as 35 cents earnings per share, up 12% and flat, respectively, vs. the year-earlier quarter. Both metrics topped Wall Street expectations for $1.31 billion and 32 cents. Three months ago, Nvidia guided to $1.3 billion in sales, plus or minus 2%. Nvidia ended fiscal 2016 with $5.01 billion in sales and $1.08 EPS, up 7% and 4%, and topping the consensus model of 29 analysts polled by Thomson Reuters for $4.92 billion and $1.05. Current-quarter guidance shot well above the consensus. For fiscal Q1, Nvidia sees $1.26 billion in sales, plus or minus 2%. That would be up 9.5% year over year. Wall Street had modeled $1.23 billion. Analysts also expect 28 cents EPS, which would be up 17% vs. the year-earlier quarter. Nvidia doesn’t provide an EPS outlook. Nvidia CEO Jen-Hsun Huang, in the company’s earnings release, credited investments in PC gaming, virtual reality, deep learning and autonomous vehicles for the Q4 beat. He also expects Nvidia to delve further into the nascent Internet of Things market. “Deep learning is a new computing model that teaches computers to find patterns and make predictions, extracting powerful insights from massive quantities of data,” he said in the release. “We are working with thousands of companies that are applying the power of deep learning in fields ranking from life sciences and financial services to the Internet of Things.” MKM analyst Ian Ing said Tuesday he expects Nvidia to benefit from Facebook ( FB )-owned Oculus Rift’s pledge to release more than 100 VR games by the year’s end. Oculus recommends graphics processing units (GPUs) from Nvidia or rival  Advanced Micro Devices ( AMD ).