Tag Archives: amd

Oculus Rift VR Sales Pit Nvidia, Advanced Micro In GPU Battle

Facebook ( FB )-owned Oculus has pledged to release more than 100 virtual reality games by year’s end, a move that will buoy Tesla Motors ( TSLA ) partner Nvidia ( NVDA ), MKM analyst Ian Ing wrote Tuesday as he reiterated a buy rating on shares. Intraday on the stock market today , Nvidia stock jumped 3.2% ahead of the chipmaker’s scheduled fiscal Q4 earnings report. Late Wednesday, Nvidia is expected to report record-breaking sales, but earnings that fall for the first time in two years. For Nvidia’s fiscal Q4, the consensus of 29 analysts model $1.31 billion in sales, up 5% year over year, and 32 cents earnings per share ex items, down 9% vs. the year-earlier quarter. Three months ago, Nvidia guided to $1.3 billion in sales, plus or minus 2%. Analysts view $4.92 billion in sales and $1.05 EPS minus items for Nvidia’s fiscal 2016 — up 5% and down 6%, respectively, vs. fiscal 2015. Nvidia’s Q4 guidance implies a full-year outlook of $4.91 billion in sales. MKM’s Ing expects Nvidia to outperform its peers “in a challenging earnings season.” Other chipmakers have suffered Apple ( AAPL ) fatigue in December and ahead of the weak March quarter. “Nvidia remains our top pick based on strength in its core gaming business (58% of October quarter sales) plus abundant ‘call options’ where GPUs could become the ideal solution in coming years,” Ing wrote in a research report. Tesla, Audi, Volkswagen ( VLKAY ), Honda ( HMC ) and BMW use Nvidia graphics processing units (GPUs), according to a November Canaccord report. Continuing infotainment and autonomous-driver efforts will boost Nvidia, Ing wrote. With the release of the Oculus Rift VR headset in March, Nvidia and rival Advanced Micro Devices ( AMD ) are poised to “leapfrog each other” to supply gamers’ video cards, Ing wrote. The Rift website specifies the Nvidia GTX 970 or AMD R9 290. Pricing trends have been relatively benign lately, Ing wrote. Average sales prices for the GTX 980 and 970 are flat sequentially, with the GTX 960 down 1% quarter over quarter. All three are year-old cards. ASPs for the GTX Titan X are up 7% quarter over quarter with only three SKUs now available. “This suggests that demand is outstripping supply for these cards, which include scientific and academic applications,” Ing wrote. He expects prices to surge as Nvidia refreshes its Pascal series later this year. Ing reiterated a 39 price target on Nvidia stock. He noted that bears are “overly focused” on Nvidia gaming’s high exposure to China — about 40% of gaming sales in August. “Gaming growth is more driven by share gains against traditional entertainment consumption rather than macro,” he wrote. “We note that original equipment manufacturer sales were less than 10% of sales last quarter.” Nvidia stock surged 70% over four months between August and December. But shares have fallen lately, and Nvidia stock is now 24% off its 2015 high of 33.94 achieved Dec. 30.  

Apple Supplier ARM Topples On Mobile Decline; Eyes IoT, Cloud

U.K.-based  Apple ( AAPL ) supplier ARM Holdings ( ARMH ) stock toppled Wednesday, as its earnings disappointed despite Q4 sales topping Wall Street expectations, amid a strategic shift into the Internet of Things and cloud markets. ARM stock fell 8.8% Wednesday, to 37.74, and touched its lowest point since July 2013. Shares under-performed IBD’s 41-company Electronic Semiconductor-Fabless industry group, which fell a fraction after touching a 16-month low this week. ARM isn’t pretending the smartphone market hasn’t stalled, Rene Haas, the company’s executive vice president and chief commercial officer, told IBD. But ARM still has headroom for growth, he said. “It’s nothing we haven’t been expecting nor planning for,” he said. “But about half our revenue comes from outside smartphones.” For Q4, ARM reported $407.9 million in sales and 8.2 pence (12 cents) earnings per share ex items. Both measures were up 14% year over year, ARM said. The consensus of 11 analysts polled by Thomson Reuters modeled $398.1 million and 38 cents (26.2 pence). The designer of mobile chips saw sales rise 15% for the year, to $1.49 billion. EPS rose 25% to 30.2 pence (44 cents). Fourth-quarter licensing sales fell 2% to $1.58 million, but royalty sales rose 31% to $216.7 million. Software/tool sales rose 19%. However, smartphone-chip sales fell 3%. ARM guided to 2016 sales “broadly in line with market expectations” at roughly 9.7% year-over-year growth to $1.63 billion in sales, William Blair analyst Anil Doradla wrote in a research report. Doradla reiterated his outperform rating on ARM stock, but Canaccord Genuity analyst Matthew Ramsay cut his price target to 55 from 60, citing continued macroeconomic semiconductor uncertainty. He maintained his buy rating on ARM stock. ARM Finagles Stalled Mobile Industry Roughly 45% of ARM’s sales stem from smartphones, down from 60% in 2010. The smartphone slowdown won’t slug ARM nearly as hard as its rivals, Haas told IBD. During Q4, ARM shipped 4 billion chips. Half of the smartphone chips shipped contained ARM’s 64-bit processor, which commands higher royalty fees than ARM’s older, 32-bit processor. About 40% of smartphone chips shipped contained ARM’s graphics processing unit (GPU), Mali, and 10% held eight or more cores. “What that means is that even as growth slows from a unit standpoint, we still have good room to grow because underneath the hood we have three strong factors that drive growth in the market,” Haas said, referring to processors, GPUs and cores. ‘Cars Are Just Getting Smarter’ In 2016, ARM expects to grow further into the cloud and Internet of Things markets, Haas said. Licensing in both segments could be a boon. Networking market share grew to 15% in 2015 vs. 10% in 2014, and ARM now counts Broadcom ( AVGO ) and Marvell Technology Group ( MRVL ) among its networking chip clients. Advanced Micro Devices ( AMD ), Nvidia ( NVDA ) and Qualcomm ( QCOM ) also use ARM-based server chips, according to ARM. “That (5% jump in networking) is a pretty big jump, given what’s going on in that marketplace and given that those markets have some stickiness once you’re inside,” Haas said. In the Internet of Things market, Haas expects ARM to benefit from burgeoning automotive intelligence. Most “embedded technologies” — thermostats, motors, drones and vehicles — use older technology. But the 8-bit micro-controllers powering those technologies are rapidly being replaced by the 32-bit architecture, Haas says. “The fact is cars are just getting smarter,” he said. “There are cars today that could have 100-plus chips inside them. A smartphone might only have one or two chips using ARM technology.”

‘Star Wars,’ ‘Call Of Duty,’ eSports Buoy Nvidia, AMD

Popular video games “Star Wars Battlefront” and the latest installment of “Call of Duty” buoyed gaming chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) in 2015, an MKM analyst wrote Wednesday, as he suggested Nvidia could leapfrog its main game rival in 2016. But that will require Nvidia to slash its GPU (graphics processing unit) prices, only a distant possibility given economic uncertainty in Europe, MKM analyst Ian Ing wrote in his