If you were lucky enough to have bought some NVIDIA stockearly last year(2001), perhaps you were also lucky enough to sell it at a 300% profit in January ofthis year. Oh how the mighty have fallen. With a 52 week high of $72.66, the current price of $16.10 is a painful reminder of the market’s massive downturn and NVIDIA’s lack of invincibility juice. In today’s climate, you would think that a 13.7% net profit margin would keep investors secure, but challenges are mounting for NVIDIA, and it may take more than pixel pushing to get the company on the up-and-up again.This article at Business Weekdetails the challenges that lie ahead.
Now, however, the Santa Clara (Calif.) company is dodging a hail of bullets engraved with its name. PC sales are stagnating. Competition from rivals such as ATI Technologies Inc. (ATYT ) and Intel Corp. (INTC ) is intensifying. Manufacturing problems are threatening to delay Nvidia’s next-generation chip. Just to top things off, the Securities & Exchange Commission is digging into the company’s accounting practices.
ATi’s crown-stealing Radeon 9700 wasunveiled late last week, and it has become quite clear that nothing less than the NV30 can topple the new victor. Few doubt that the NV30 will see the light of day. The question is,when? Analysts are saying that if the NV30 doesn’t see volume before the holiday season, NVIDIA’s 2003 revenues will shrink even more (but still in the black, mind you). When a company posts a year with 84% revenue growth (2001), anything less is a disappointment to the boys on theStreet. To make matters worse, these days the letters "SEC" mean, "oh no, here we go again."
