NVIDIA Hits 52-Week High - Analyst Blog
15 November 2013 - 8:00PM
Zacks
Shares of NVIDIA Corp. (NVDA) hit a new 52-week
high of $16.32 on Nov 14, eventually closing at $16.22. The closing
share price represents a modest one-year return of 39.9% and
year-to-date return of 27.5%.
Share prices have been increasing continuously since the company
reported third-quarter results on Nov 7. NVIDIA reported modest
sequential revenue increase in its GPU business (up 2.1%
sequentially), while revenues from Tegra segment increased an
astounding 111.4%. Desktop GeForce GPU revenues, revenues from
GeForce gaming GPUs and high-end notebook GPUs increased on a
sequential basis.
The Tegra segment was aided by the shipment of Tegra 4
processors to 15 mobile device manufacturers such as
Hewlett Packard (HPQ), Microsoft
(MSFT), Asus, Toshiba and Acer, to name a few.
The company expects the Tegra processors to generate incremental
revenues, going forward, due to their acceptability and demand.
Moreover, product launches such as GeForce GTX 780 Ti, a new gaming
GPU, and Quadro K6000 graphics cards should positively impact
revenues.
Apart from these, NVIDIA also increased its quarterly dividend
payment by 13% and management authorized a stock repurchase plan
worth $1.286 billion ending in Jan 2016. The company also intended
to increase shareholders’ value through stock repurchases and
quarterly dividend payments and expects to distribute $1 billion in
2015. These investor-friendly initiatives not only boost earnings
but also instill investors’ confidence and loyalty.
Despite these positives, the continuous decline in PC sales is
expected to impact NVIDIA’s GPU segment. Competition from the likes
of Intel Corp. (INTC) and QUALCOMM and higher
operating expenses are also expected to hurt profitability in the
near term.
Currently, NVIDIA carries a Zacks Rank #3 (Hold).
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