) 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
The Tegra segment was aided by the shipment of Tegra 4
processors to 15 mobile device manufacturers such as
), 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
) 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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