Graphics chipmaker Nvidia (NASDAQ:NVDA) is in a difficult position long term. While its discrete graphics card business is still relatively strong, taking market share in 2012 from rival AMD (NYSE:AMD), this is a market that, overall, will continue to shrink in the coming months and years. To its credit Nvidia has attempted to move into different markets, most notably the low-power mobile SoC (system on a chip) market with its Tegra line of ARM-based solutions. Now, it is in the process of launching its fourth generation of the Tegra based on the Cortex A-15 core, for which early benchmarks are long on big numbers and short on context. The news last month confirming rumors that the company would not be supplying the SoC at the heart of the next Google (NASDAQ:GOOG) Nexus 7 tablet deals a serious blow to the company’s projected sales for the rest of 2013.
AMD (NYSE:$AMD) has had possibly one of the roughest couple of years that a company can have and still be functional.Serious underperformance of the last two top-end CPU cores – “Bulldozer” and “Piledriver” – versus Intel’s (NASDAQ:$INTC) Sandy Bridge derivatives have seriously degraded market share in the personal computing space due to real-world single-threaded performance among other issues.Only in the low-power, low-cost – and therefore low-margin – business could AMD compete with anything Intel had to offer.Its Brazos E-series APU’s built on the 40nm ‘Bobcat’ core were head and shoulders above anything Intel could muster from its aging Atom line. And it’s there where the hopes of AMD’s resurrection will be placed.
Yahoo! Inc (NASDAQ:$YHOO) revealed last month that it will start using its rival Google’s (NASDAQ:$GOOG) advertising services Adsense and AdMob as it looks to increase its revenue base. In an official blog post dated 6th February, the company said that it has entered in a non-exclusive agreement for contextual advertising to be displayed on Yahoo and its co-branded sites for autos, finance, news and sports. This is in line with Yahoo’s CEO and a former Google executive Marissa Mayer’s strategy to give a better experience to Yahoo’s users through more customized ads so that they can spend more time on Yahoo properties. Although Yahoo’s users won’t notice any significant change it is almost certain that Yahoo will see increasing revenues through its partnership with Google.
Last year, was the year of the write down at Hewlett-Packard (HPQ). New CEO Meg Whitman finally began cleaning up the messes of her predecessors and took an $8.8 billion write down on Autonomy and another $10.8 billion related to the 2008 acquisition of EDS and the stock retreated back to 2002 levels, the year when HP acquired Compaq for $25 billion ushering in the days of cheap laptops and board room squabbles. But to start 2013 HP finally delivered news that wasn’t outright awful and for that the market responded with a massive short-covering rally.
Its latest quarterly results beat analysts’ estimates and it raised its FY-2013 outlook somewhat. After destroying more than $30 billion in ill-advised M&A deals over the past decade, HP finally showed up for work. I hate to be mean about this but, frankly, the situation is embarrassing for one of the truly innovative companies of all time.
Texas Instruments (TXN), the world’s leading analog chipmaker and third largest semiconductor manufacturer, reported an 11% drop in quarterly income to $264 million as revenues dropped by 13% to $2.98 billion, just managing to beat the revenue estimates by around $30 million. Operating profits have dropped by 62% from $365 million in Q4-2011 to $139 million in Q4 2012. Excluding a tax benefit of $0.15 per share, the earnings per share was $0.08, 1 cent more than analysts’ estimate. The long-term story for TI has been its unwillingness to commit to the future in mobile computing which ultimately pushed its OMAP SoC to the fringes of the ARM (ARMH) revolution in smartphones.
Peter Pham is an author, international fund manager, and a registered financial director by the Cayman Monetary Authority (CIMA). In 2013 he published his first book entitled, The Big Trade: Simple Strategies for Maximum Market Returns. He currently manages the portfolio of a global hedge fund and runs an asset management company, Phoenix Capital. (read more)
The Big Trade: Simple Strategies for Maximum Market Returns
This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.