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Tuesday, April 29, 2008

Nvidia (NVDA) loses some market share

With 85% share of the desktop discrete market, its pretty tough to go anywhere but down. Intel has an inferior product but they have great hooks into their customers via processor sales. At the low end, comparable graphics are a requirement but the best of breed is not essential. Mercury Research market share data reveals that Nvidia has given up ~6% share in notebook GPUs, which is the biggest growth sector of the aging PC market.

The street has been very cautious on Nvidia all quarter. There was a discernible shift in company tone last quarter, with management stifling their bullishness as if to keep from triumphantly declaring how good business was at the beginning of the quarter to barely getting to the number. All quarter Taiwan Semiconductor, their main foundry, has been indicating some weakness in graphics card customer production.

My guess is the company will navigate the Intel and ATI threats better than the street thinks but the near-term is choppy. Both Goldman and Deutsche Bank are out cautious on NVDA today. Nvidia reports May 8th.

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