Can These Hail Marys Save NVIDIA Stock?

Frustrated with its lack of wins in the mobile market, chip designer NVIDIA (NASDAQ: NVDA  ) came up with a new strategy: License your graphics designs to other mobile processor builders.

NVIDIA's high-performance graphics solutions tend to crush competing designs from Qualcomm  (NASDAQ: QCOM  ) and PowerVR, but only in terms of raw performance. The picture is far murkier when you include factors like battery life and pricing. NVIDIA probably doesn't stand much of a chance at breaking into Qualcomm's products, given that the big Q likes to design its own graphics systems. But maybe Samsung or Apple would consider replacing their creaky PowerVR licenses with NVIDIA ones?

If that idea doesn't pan out, NVIDIA is also about to launch an Android-based handheld gaming system. Have you heard of the NVIDIA Shield, which launches on June 27? No? That's probably not a good sign. Nintendo can breathe easy; its dominant 3DS system's market share safe from harm this time.

NVIDIA stock has underperformed the market in the long run and traded sideways over the last year. The company could use a big win right now, or maybe two. In the video below, Fool contributor Anders Bylund explains what NVIDIA's pair of Hail Mary plays mean for investors. Spoiler alert: It's not good news.

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Read/Post Comments (5) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On June 24, 2013, at 11:31 AM, Ostrowsr wrote:

    Dang. And I bought NVDA based on a "Stock of the Year" article on this site. Time to rethink this one.

  • Report this Comment On June 24, 2013, at 11:48 AM, jwtrotter wrote:

    This is one of the most poorly informed and distorted article/video blogs posted by Fool yet. The comments about battery life and pricing are simply wrong, and the denial or outright deception on how the Tegra chip is doing with recent wins already publicized borders on intentionally lying. Really, this deserves consideration for litigation.

    The comments about Shield are also an incredible joke. How many people have heard about the Shield launch on the 27th? Basically EVERY person I talk to that is into gaming which is the target audience. Does this author intend to hold a job anywhere else?

  • Report this Comment On June 24, 2013, at 1:12 PM, emparq wrote:

    [2:46] ...Nvidia graphics were part of the Xbox 360 for example...

    false - Nvidia graphics are in the Playstation 3, not XBox 360.

    http://en.wikipedia.org/wiki/RSX_'Reality_Synthesizer'

    http://playstation.about.com/od/ps3/a/NVIDIAinPS3.htm

  • Report this Comment On June 24, 2013, at 2:54 PM, anonimus234 wrote:

    First of all if you want people to beleive you you dont say um three times in a sentence. you might have actually caused the stock to go up. secondly for years whenever someone bought a high price computer processor the always reached for a good grafic card and put it on the counter right next to their processor. now with tablets they cant do this. nvidia is trying to give their customers a way to do this. intel has the fastest cpu for tablets but everyone criticised their graphics. this would be a way for intel to gain the undisputed lead as far as speed is concerned if they realized what customers want. if any company choses to take nvidia up on their offer and the others dont. the ones that do will gain maket share. I dont know if this is true but i read nvidia sells their complete chipset for 25 dollars. i dont remember what model. so what should be the price per tablet of intel or apple to build it themselves, probably not mush. however older people generally ask younger people "gamers" what tablet is the best" for this reason I personally beleive someone from nvidia is a genius for licencing out their gpus. in time the price for nvidia stock will show this.

  • Report this Comment On June 25, 2013, at 12:08 AM, giuseppe1149 wrote:

    Those of you that are shocked by this article just bear in mind who it was written by

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