On Thursday night, chip designer NVIDIA
Word on the Street
The average analyst (presumably about 5'9" and wearing a beige sweater) sees NVIDIA's earnings falling 44% year over year to $0.14 per share. Revenue should be pretty flat at $1.0 billion.
Providing some additional detail, Rajvindra Gill of Needham believes that the company could beat estimates this quarter. NVIDIA recently wrested away the plum contract for Apple's
BMO Capital adds that the Microsoft
The Foolish takeaway
NVIDIA used to be a pure play on computer graphics, but that is changing fast. The graphics division accounted for 80% of the company's sales in the 2011 fiscal year but just 64% over the last four quarters. The Tesla line of supercomputing chips is slowly encroaching on the old graphics turn, but Tegra's mobile heft is the real heir to NVIDIA's internal throne. The consumer products segment, which includes Tegra, has nearly quadrupled its annual revenue run rate since January 2011.
In this report, any success on the graphics side would just be bonus gravy on top of the burgeoning Tegra line's rise to power. Look for management's comments on mobile product wins and guidance on how NVIDIA's in-house LTE radio processing is received by would-be handset and tablet customers. Given the potential cost savings and streamlined design that comes from building LTE processing into the Tegra itself, I'm guessing we'll hear nothing but good news on that front.
NVIDIA is in the unusual position of riding Apple's powerful coattails in some markets while facing Cupertino head-to-head in others. Read up on the challenges and opportunities this unique relationship might bring in our brand-new premium report on Apple. The company serves as both lifeblood and death knell for a number of high-flying tech stocks, so make sure you understand the whole Apple story by clicking here.