NVIDIA Leads the Race to the Bottom As Its Stock Takes a 54% Hit in 4Q18

cageymaru

cageymaru

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Wall Street investors are fleeing chip stocks as AMD, Micron, NVIDIA and others are getting hammered by a bear market. The honeymoon is over for stock market darling NVIDIA whose meteoric rise from early 2016 through September 2018 has turned into a meteor shower. NVIDIA has lost 54% of its value in the 4Q18 as the Nasdaq Composite Index closed in a bear market. The first troubling signs for NVIDIA were contained in its weaker-than-expected quarterly revenue and guidance.

NVIDIA founder and CEO Jensen Huang confirmed that the crypto-currency boom was over and NVIDIA had an excess inventory of channel product in the filing. Since then we have heard rumors of postponed product launches as NVIDIA attempts to move older inventory. The problems for NVIDIA are deeper than just "excess inventory" as the data center numbers didn't meet Wall Street's expectations. Now more rumors are pointing to SoftBank selling its NVIDIA stake early next year. At least NVIDIA is much healthier than it was in 2010.

Nvidia's rapid sell-off is a reminder of how much speculation went into its earlier run-up, when the company played squarely into the hype surrounding artificial intelligence. Researchers flocked to the company's GPUs to accelerate the training of their complex models, and Nvidia sought to capitalize on the craze. At its high, Nvidia was selling for almost 54 times forward earnings, well over four times the current price-to-earnings multiple for the semiconductor sector, according to FactSet. Sales and profit continue to grow -- just not fast enough to meet investors' lofty expectations.
 
I wonder if "Sales and profit continue to grow -- just not fast enough to meet investors' lofty expectations" means the race to meet those lofty expectations resulted in RTX card overpricing and quality shortcuts on the 2080 cards.
 
Several of my stocks are in what Cramer calls the House of Pain. It was not a good day on the market (for me). I'm in for the long run, so not the end of the world, but damn - it was not fun watching the balance sheets today.
As a consumer, I'd like to see Nvidia get some sales going to move out their old inventory. I'll take a 1080ti off their hands for the right price.
 
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Im not sure Nvidia is going to get back to almost 300, but i do see the market coming back later on next year. Best thing to do is just sit if you can afford to leave the money there. Let the channel clear and new products build the profits back up. Tech sector will once again be a darling once all the datacenter/enterprise numbers come rolling in.
 
If they'd embrace Freesync and release 80,70,60 series for the prices they realistically should I have a feeling it'd be saying something different. I love my 1070, but if there was a card with at least 30-40% improvement the speed for the same price as I paid ($385) before I'd be totally down. In a country that wages continually lower it's hard to justify purchasing a 1000+ card that is only a bit better than the older generation and little reason to upgrade outside of 4K, and even then not that terribly great.
 
That is not the end of it. Softbank has announced a few days ago that they will be dumping Ngreedia's stock in 2019. I guess it will be a buyers market if you are in it long term, but with Intel coming in to the GPU game I would not be so sure.
Huang deserves it. Fuck him and his dumbass jacket...:D
 
I’d wager Nvidia will be back at $30 within the next two years

Look at its lifetime history. That’s home.

Irony is bitcoin dropped from $20,000 to $4,000
And Nvidia will (may) drop from $300 to $30.

Percentage wise then Nvidia investors who bought at the peak will have lost more then bitcoin investors who bought at the peak...

Yes. Irony...
 
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DukenukemX said:
Everyone's stock is taking a huge hit. Probably doesn't help that Nvidia's RTX cards are overpriced but we're probably approaching a recession and that plays a bigger role in their stock tumble.
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The RTX cards make up practically nothing of their yearly. Their cost is “appropriate” to their demand and their yields, they got hammered in the data center and AI markets they are late with the new data center cards and existing customers chose not to upgrade. They need a Tesla refresh and their new Titan missed a critical refresh cycle. Most chip manufacturers were horribly over inflated because of the crypto craze and with that winding down investors are catching on so they are dumping stock. This is not so much alarming as it is a rebalance.
 
The Nvidia sink is a rebalance, I believe the amd sink to 16 is overdone. Amd has diversification in the cpu space that Nvidia doesn’t have.
 
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Its more along the lines of China approaching recession. The west is only going to gain. Look at what's going on in Europe. Everyone is reverting to nationalist politics. China is fucked they had a taste and now its time to start doing what they do best. Its farming rice...:D
 
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Why the focus with Nvidia?.. AMD also lost a huge portion of it's value.. in october AMD reached 32.72$ per share today it closed at 16.76$ per share that's almost 50% lost value..
 
Krenum said:
No, buy AMD stock. They have their fingers in the next console releases.
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But that's it though, really?

I don't see AMD innovating in a meaningful way, while Nvidia is sure to rebound.

Could be wrong about AMD and Nvidia of course- I'd prefer to be wrong about AMD!- but history does teach lessons.
 
IdiotInCharge said:
But that's it though, really?

I don't see AMD innovating in a meaningful way, while Nvidia is sure to rebound.

Could be wrong about AMD and Nvidia of course- I'd prefer to be wrong about AMD!- but history does teach lessons.
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If AMD's stock keeps going down, surely buy it, back in 2014 it was $1.80 a share, then it shot up to $40 after the zen launch. Wish I would have forseen that, wont make the same mistake twice. But its a gamble, like anything :)
 
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IdiotInCharge said:
So, buy Nvidia stock?
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While things would likely have to get a lot worse, stocking up on arms, ammo, and non-perishable foodstuffs wouldn't necessarily be out of the question. Not that I'm a survivalist myself, mind you; but being prepared for a rainy day seems to come to mind more often nowadaze.

You can't eat nor drink NVIDIA stock, nor can you hit someone over the head with it while you're trying to defend you and yours.
 
IdiotInCharge said:
But that's it though, really?

I don't see AMD innovating in a meaningful way, while Nvidia is sure to rebound.

Could be wrong about AMD and Nvidia of course- I'd prefer to be wrong about AMD!- but history does teach lessons.
Click to expand...

What I see and apparently others do too is that AMD still has very little market share. With good (competing), well placed products and pricing they can erode Nvidia and Intel market share into AMD market share.

Even if tech demand goes down AMD is in the best position to make great gains. However they can shit the bed too but, more risk more potential rewards.
 
Krenum said:
If AMD's stock keeps going down, surely buy it, back in 2014 it was $1.80 a share, then it shot up to $40 after the zen launch. Wish I would have forseen that, wont make the same mistake twice. But its a gamble, like anything :)
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Crypto saved AMD, Crypto fucked Nvidia.

Crypto giveth and Crypto taketh away. Amen.
 
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Krenum said:
No, buy AMD stock. They have their fingers in the next console releases.
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They also have a solid gain in the Server market, and word on the street is their new Data Center cards are going to be tight, I have a Tesla and 3 Titans that need to be upgraded and I am holding out to see what they bring to the table since nVidia underwhelmed.
 
They have an abundance of stock, crypto craze is over for the performance possible on GPU's but they still want to keep the pricing.

I really hope everyone stops buying any nvidia GPU's for a year they really need to be brought back to reality

Probably enough people will keep buying and they can just call it a day for a few quarters
 
I'm going to double down on this stock like an SJW. I'm down $3.5 grand though and yes, that sucks.
 
Check this article out I just saw on TD Ameritrade's site (Copy/Paste)

Bernstein Litowitz Berger & Grossmann LLP Announces Securities Class Action Suit Filed Against NVIDIA Corporation And Certain of Its Executives
6:00 pm ET December 21, 2018 (PR Newswire) Print

Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") today announced that it filed a securities class action lawsuit on behalf of its client Iron Workers Local 580 Joint Funds against NVIDIA Corporation ("NVIDIA" or the "Company") (NASDAQ: NVDA), and certain of its executives (collectively, "Defendants"). The action, which is captioned Iron Workers Local 580 Joint Funds v. NVIDIA Corporation, et al., No. 18-cv-7669 (N.D. Cal.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. 78j(b) and 78t(a), and Rule 10b--5 promulgated thereunder, 17 C.F.R. 240.10b-5, on behalf of investors who purchased NVIDIA's stock between August 10, 2017 and November 15, 2018, inclusive (the "Class Period").

The Complaint alleges that, during the Class Period, Defendants violated provisions of the Exchange Act by issuing false and misleading press releases, filings with the U.S. Securities and Exchange Commission ("SEC"), and statements during investor and analyst conference calls.

NVIDIA designs, develops, and markets graphics processing units ("GPUs") and related software. Although traditionally used in connection with computer gaming, demand for the Company's GPUs surged as NVIDIA's GPUs became widely used in connection with cryptocurrencies. Given the volatility in the cryptocurrency market, the Company's ability to adapt to the ever-changing cryptocurrency landscape was critical to investors.

Throughout the Class Period, Defendants assured investors that the Company followed the market closely and could adjust to rapid changes in the cryptocurrency markets. Even as analysts increasingly began to question the Company's ability to manage inventory in the face of an uncertain cryptocurrency market, Defendants touted that NVIDIA and its executives are "masters at managing our channel, and we understand the channel very well." NVIDIA also repeatedly assured investors that surging demand for GPUs among cryptocurrency miners would not have a negative impact on the Company because of strong demand for GPUs by NVIDIA's core customer base of computer gamers. As a result of these misrepresentations, NVIDIA shares traded at artificially inflated prices throughout the Class Period.

The truth began to be disclosed on August 16, 2018, when NVIDIA lowered its revenue guidance for the third quarter of 2018 and reported that it no longer expects a meaningful contribution from cryptocurrency miners for the remainder of the year. NVIDIA also reported that its GPU inventory had ballooned by over 30% from the prior quarter, which investors feared could be a sign of slowing demand for NVIDIA's GPUs. Then, on November 15, 2018, NVIDIA significantly cut its revenue guidance for the fiscal fourth quarter, revealing that revenue would decline by over 7% in the quarter. NVIDIA attributed its poor financial results to surging inventory of midrange GPUs that built up in the channel before the rapid fade of cryptocurrency mining. As a result of these disclosures, the price of the Company's stock declined significantly.

If you wish to serve as lead plaintiff for the Class, you must file a motion with the Court no later than February 19, 2019, which is 60 days after the publication date of December 21, 2018. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.

Iron Workers Local 580 Joint Funds is represented by BLB&G, a firm of over 100 attorneys with offices in New York, California, Louisiana, and Illinois. If you wish to discuss this Action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at 212-554-1493, or via e-mail at avi@blbglaw.com.

Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity. Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination, and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.

CONTACT:Avi JosefsonBernstein Litowitz Berger & Grossmann LLP1251 Avenue of the Americas, 44th FloorNew York, New York 10020(212) 554-1493

https://c212.net/c/img/favicon.png?sn=NY10430&sd=2018-12-21

View original content:http://www.prnewswire.com/news-rele...-and-certain-of-its-executives-300770409.html

SOURCE Bernstein Litowitz Berger & Grossmann LLP

https://rt.prnewswire.com/rt.gif?Ne...11800PR_NEWS_USPR_____NY10430&DateId=20181221
 
IdiotInCharge said:
But that's it though, really?

I don't see AMD innovating in a meaningful way, while Nvidia is sure to rebound.

Could be wrong about AMD and Nvidia of course- I'd prefer to be wrong about AMD!- but history does teach lessons.
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If the Ryzen 2 leaks are close to the truth then AMD will be a strong stock soon. They will be taking marketshare away from Intel which is huge. Apparently only a 10% increase in cpu market share would make AMD more money than the whole of the GPU market. I'm definitely set on buying a Ryzen2 cpu if it can clock to 4.6GHz+.
 
Lakados said:
The RTX cards make up practically nothing of their yearly. Their cost is “appropriate” to their demand and their yields, they got hammered in the data center and AI markets they are late with the new data center cards and existing customers chose not to upgrade. They need a Tesla refresh and their new Titan missed a critical refresh cycle. Most chip manufacturers were horribly over inflated because of the crypto craze and with that winding down investors are catching on so they are dumping stock. This is not so much alarming as it is a rebalance.
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The RTX cards don't aim for the mainstream market which means a lot of people are going to continue to use their sub $250 graphic cards. People generally have a budget and won't pay more than a certain amount for something. You can't push product if the people can't afford it. As we approach the recession, cheaper will be better.

Araxie said:
Why the focus with Nvidia?.. AMD also lost a huge portion of it's value.. in october AMD reached 32.72$ per share today it closed at 16.76$ per share that's almost 50% lost value..
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Yep, everyone's stock is taking a huge hit. You won't hear that on CNN or Fox News. Home, Auto, gaming industry, and etc. The cost of living has reached peak fuck you and people are now cutting back.
 
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