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NVIDIA: This Chipmaker Is a Good Buy

July 24, 2014 | About:
Rustic Nomad

rusticnomad

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Santa Clara-based chipmaker NVIDIA (NVDA) as of late released strong final quarter results. NVIDIA's stock has gotten a massive boost in the past one year as the organization continues to put in strong performances on the again of increasing sales of its graphics chips. Also, with a bounce back in sales of its Tegra portable chips, NVIDIA investors have discovered yet an alternate reason to be optimistic about the organization's prospects. Likewise, NVIDIA seems to be picking up an upper hand on its prime opponent Advanced Micro Devices (AMD), both in terms of piece of the pie and item improvement.

Positives all around

Nvidia's results were nice with quarterly revenue increasing 3% to $1.14 billion. Non-GAAP earnings added up to $0.32 per share in the final quarter, up from $0.26 per share in the third quarter and well ahead of the $0.18 per share consensus estimate. This outperformance is set to continue since NVIDIA is riding on a considerable measure of tailwinds as we shall see.

First off, NVIDIA's Geforce business is performing great as a result of top of the line PC gaming. The organization is seeing great business opportunities because of the release of some astounding realistic substantial games. NVIDIA is expecting better Geforce GTX sales in Asia because of the developing ubiquity of games such as Blade and Soul. NVIDIA is anticipating the boom in the PC gaming business sector, which is anticipated to hit $20 billion this year.

Also, NVIDIA has entered into a partnership with IBM (IBM) for its Tesla Gpus, and this should strengthen its GPU business further on the enterprise front. The organization has a great deal of demand from the Tesla GPU accelerators. The inclusion of Tesla in Europe's fastest supercomputer, as well as Ansys liquid, indicates stronger performance from NVIDIA going ahead.

Tegra and GRID also picking up steam

NVIDIA's GRID is also picking up momentum with trials increasing 46% quarter over quarter. Further, in the portable segment, it expects more from its latest Tegra K1, which is the first processor that delivers PC-class graphics, as per NVIDIA. Looking forward, in the auto segment, NVIDIA is seeing stronger reception of the Tegra K1 because of organization in driver assistance systems.

What is much more impressive is that NVIDIA has stolen a walk over its most outstanding adversary AMD, which was looking to make some invasion into tablets with its semi-custom chips. Despite the fact that AMD hasn't focused much on the versatile space, however lower sales of notebooks and registering chipsets are presumably compelling it to take a look at different options, and the tablet space was one such choice. Moreover, with NVIDIA officially releasing a reference tablet for the Tegra K1 , it can pose credible challenge for AMD going forward.

Conclusion

NVIDIA is making a great deal of great moves. The organization looks to be in a decent position to develop further with strong performances from its portable and processing businesses, and innovations such as the Tegra K1. Also, a dividend yield of 1.90% makes NVIDIA significantly more alluring, so


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