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NVIDIA Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: NVIDIA Corporation (Nasdaq: NVDA  ) popped 11% in intraday trading today after it reported quarterly EPS of $0.23, trouncing the consensus estimate of $0.16.

So what: NVIDIA has been working to move beyond its legacy business of providing graphics processors for PCs as graphics processing is increasingly being integrated into PC microprocessors. NVIDIA's efforts, centered around its Tegra processors for mobile devices, appear to be gaining better-than-expected traction.

Now what: NVIDIA's Tegra chips were well-received at last month's Consumer Electronics Show and have been designed into smartphones and tablets made by Motorola Mobility Holdings (NYSE: MMI  ) , LG Electronics (066570.KS) and Dell (Nasdaq: DELL  ) . With the Tegra line considered a strong offering in the high-growth mobile device market and revenue guidance for the current quarter about 7% above the consensus forecast, NVIDIA's earnings could get a significant boost going forward. That said, rising operating expenses and hard-to-predict smartphone and tablet sales are risks to the outlook.

Interested in more info on NVDA? Add it to your watchlist here by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (1)

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  • Report this Comment On February 17, 2011, at 9:35 PM, Pkylie wrote:

    The tegra while booking some design wins sports a margin of less than 10%. Futhermore, the tegra incorporates a core from ARM plc, and nvidia Did not natively designed the ARM core from ground up unlike Qualcomm, Texas instruments, Apple and a host of others. Apple has no need for the Tegra . Does anyone seriously expect iPhone and iPad to lose its market leading share anytime soon ?

    Both Qualcomm, Texas instruments have baseband processors to include in their cores to handle 3G/4G services, nvidia has NONE. Even broadcomm/marvel possess better technologies than just a pure graphics player.

  • Report this Comment On February 18, 2011, at 9:40 PM, scvalley wrote:

    we thought is was great to have a q report and provide guidance...

    the next day to provide new guidance at a trade show.

    this stock should be headed up in the near term!

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