Nvidia Updates: Slips In Mobile Market, Likely To Win Apple’s Contract

Nvidia’s (NASDAQ:NVDA) stock is trading well below the early 2011 levels. The last couple of weeks have shown both positives and negative announcements regarding the company. A research from Strategy Analytics indicates that Nvidia has slipped in the mobile application processor market and lost its earlier 5th position to Broadcom. ^[1] This market is dominated by established players like Qualcomm (NASDAQ:QCOM) and Texas instruments (NYSE:TXN). Clearly, Nvidia’s Tegra processor hasn’t fared as well as expected during early 2011. Earlier this year, Tegra 2’s introduction was one of the prime reasons why Nvidia’s stock price soared. Nevertheless the quad core Tegra 3 does show promise. The company has been trying to snatch deals with this new product, and latest in the lineup is Acer’s tablet scheduled for 2012. ^[2]

See our full analysis for Nvidia

On the positive side, it appears that Nvidia’s graphics cards may appear in Apple’s (NASDAQ:AAPL) Macbooks next year. ^[3] This could help the company gain some share in discrete notebook GPU market against its rival AMD (NYSE:AMD).

You can modify the driver below to see how Nvidia’s price estimate can be impacted by change in discrete notebook GPU market share.

Overall analysts seem to be positive on the stock. Some of the well known research companies such as FBR Capital, Needham & Company, and Oppenheimer have buy rating on the stock.

Our price estimate of $20.91 for Nvidia, implying a premium of almost 40% to the market price, echoes similar sentiments.

Understand How a Company’s Products Impact its Stock Price at Trefis

1. Nvidia loses fifth place in smartphone chip market to Broadcom, The Inquirer, Dec 7 2011 [↩]
2. Exclusive: Acer Tegra 3 Android tablet rumours confirmed, www.t3.com, Nov 30 2011 [↩]
3. Exclusive: Apple swaps GPU suppliers again, SemiAccurate, Nov 21 2011 [↩]