Investors get confident
Nvidia shares have shot up after the company did much better than the cocaine nose-jobs of Wall Street expected. Wall Street had written off Nvidia, but last week the company reported strong demand for its newly launched chips for desktop computers and contract wins for its Tegra smartphone chips.
While Wall street continued to be a little “glass half empty” shareholders were not that pessimistic and sent Nvidia shares to the point they were at before its February warning. The company could face some major problems in the coming year.
It has invested heavily to be less dependant on the business designing graphics chips for PCs, and into the market for mobile device chips.
But it faces tough competition from the likes of chip developers Qualcomm and Intel. Its old chums Samsung and Apple are leaning more on its own chips instead of Nvidia's. Nvidia should have had a good year if it had not been hurt by a capacity shortage for its cutting edge 28 nanometer computer graphics chips.
Nvidia told analysts that its manufacturing partner TSMC had not planned for enough 28 nanometer capacity as as a result it was missing out on a lot of sales.