We've seen Nvidia launch one of its best products so far, branded as 8800GT. Wall Street, however, has concerns about something completely different: in just five business days Nvidia's stock has dropped from almost $40 a share to a current per share price of $33.59.
According to a Dow Jones Marketwatch article, analysts fear that Nvidia is facing some steep competition from AMD next year. That is what we’ve been talking about for a while, and ATI is still catching up. ATI did a good job with its RV630 and RV615 chips, as it priced them less than anyone expected. We also know that soon to come is the RV670, ATI’s first 55 nanometer part, which will also lose against the G92/ Geforce 8800GT in performance, but it will sell for much less.
Last week, Doug Freedman of American Technology Research also cited a bigger threat to Nvidia from AMD. Freedman also downgraded Nvidia from "neutral" to "sell" and said he also believes Nvidia's revenue growth may have already peaked in the quarter ending in July. Analyst Tim Luke of Lehman Brothers on Monday downgraded his rating for Nvidia from "overweight to equal weight" with a target price of $37 per share.
As we understand chips better than the stock market, I strongly suggest you read the marketwatch story below. Nvidia representatives have said they do not know what is going on with the stock price and declined to comment. We will update you if they do issue a statement.
AMD shares also dropped from $13.70 to $12.89, some six percent, at the same time.
Updated: Nvidia closed today at $34.82, showing signs of recovery, but in after-hours trading the stock went down $0.84, or 2.41%, to end at $33.98 per share price.
Nvidia shares slide on analysts' mixed outlook
Yahoo finance Nvidia 5 days chart