) hit a new 52-week high of $17.46 on Feb 13, eventually closing
at $17.36. The closing share price represents a modest one-year
return of 36.4% and year-to-date return of 9.5%.
Some of the optimism related to NVIDIA shares are attributed
to the company's better-than-expected fourth-quarter results
declared on Feb 12. The company witnessed strong sales of
GeForce, GTX, desktop and notebook GPUs.
NVIDIA's GPU revenues for the quarter came in at $947.0
million, up 14.0% on a year-over-year basis. Tegra processor
revenues grew 18.0% sequentially to $131.0 million aided by an
increase in the sale of Tegra mobile devices.
Despite strong top-line performance, higher-than-expected
operating expenses led to a year-over-year decline in the bottom
line. Nonetheless, the company provided encouraging revenue
guidance for the first quarter of 2015.
During the quarter, NVDIA gained a significant traction in the
Tegra segment due to its Tegra 4 and Tegra K1 shipments, which
boosted sales at both Tegra and GPU segments.
We believe NVIDIA's innovative product pipeline, including the
recently introduced SHIELD and mobile processor Tegra K1, will
boost top-line growth, going forward. With the launch of this
CUDA-core Tegra K1, NVIDIA can maximize user experience by
offering high performance computing (HPC) capabilities, which in
turn will increase its customer base and help in garnering
Moreover, NVIDIA's strategic alliance with
International Business Machines
) to produce GPU-accelerated editions of IBM's enterprise
software running on its Power technology. The partnership
strengthens NVIDIA's position versus
However, the continuous decline in PC sales is a cause of
concern for the company's GPU segment. Competition from the likes
of Intel and
) and higher operating expenses are also expected to hurt
profitability in the near term.
NVIDIA currently has a Zacks Rank #3 (Hold).
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