Mosesmann thinks some investors are making too much of the prospect that Nvidia’s graphics processing unit (GPU) sales may have been hurt last quarter by competition from Intel (INTC) and Advanced Micro Devices (AMD). Both UBS��s Uche Orji and Needham & Co.��s Rajvindra Gill warned on Thursday that the Nvidia could be losing GPU share, and that Nvidia’s “Tegra” processor for phones and tablets could disappoint.
Unlike the conventional wisdom indicating that Nvidia lost meaningful share this quarter, we believe that overall losses were modest in 3Q11 [...] Some Street observers may be confusing overall graphics share moves as a proxy for Nvidia dynamics and even though the company is effectively out of the “integrated” graphics markets over the past year and the trend for netbooks to use “graphics” (counted as a graphics “unit” in some industry research) also skews the numbers.
As for Tegra, Mosesman concedes a build-up of inventory of the parts could be a problem, given that OmniVision (OVTI), the maker of cell-phone camera sensors, today pre-announced weak Q3 results, and a weak Q4 outlook, and given chip maker Atmel’s (ATML) dismal remarks last Tuesday regarding the tablet market.Still, me also thinks the stock’s underperformance its 5% rise this year trails the Nasdaq Composite Index — doesn’t make sense given what has been “a beat and raise April quarter, an in-line performance in ! July, an d an above consensus outlook for FY13.”
Nvidia shares today fell 8 cents, or half a percent, to $14.74.
