NVIDIA's Tegra Is Here To Stay

NVIDIA, the world's leading graphics chip vendor, proved at CES that its Tegra processor family is here and here to stay.

Jan 8, 2014 at 10:00PM

One of the biggest concerns about NVIDIA (NASDAQ:NVDA) has been the viability of its Tegra business. Many criticisms have been offered – some very much justified and some maybe a bit unfair. Nevertheless, it's tough to ignore that NVIDIA's Tegra revenue during the current fiscal year was down dramatically from the last year. However, the coming year should be very exciting for Tegra.

Project Logan looks like a real winner
NVIDIA announced a chip known as Tegra K1, formerly codenamed Project Logan. Interestingly, this was announced in two flavors. The first is a 192-core NVIDIA Kepler SMX paired with 4+1 ARM (NASDAQ:ARMH) Cortex A15r3 processor cores. This should be the world's fastest mobile system-on-chip as far as graphics is concerned and it should be right up there with the leaders on CPU performance.

More interestingly, NVIDIA talked about the second variant of Project Logan which sports fundamentally the same system-on-chip but with the 4+1 Cortex A15r3 cores replaced with two of NVIDIA's custom "Project Denver" cores. These are ARMv8 compatible (so ARM still gets royalties), but instead of four comparatively weak cores, NVIDIA is plopping down two very fast processor cores.

This is the right design decision (as Apple and Intel have proven with A7 and "Haswell," respectively) as the vast majority of consumer software can only really take advantage of one or two cores. It was a gutsy move for NVIDIA to forego marketing hype for sound technical judgment, but this will ultimately prove to be the "right" way to go.

NVIDIA's position in the mobile world is clear – gaming focused
NVIDIA seems to be doing something very interesting with Tegra. Instead of going after the mass market of tablets, it seems to be betting on a niche in which it is uniquely positioned to play – anything and everything that needs monstrous graphics power. Now, that's not to say that Qualcomm and Intel won't compete aggressively here, but companies like Qualcomm and Intel (NASDAQ:INTC) need much higher volumes to move the needle than NVIDIA does.

This means that the focus for both Qualcomm and Intel across their product lines will be much more on higher volume, lower cost parts. Intel, in particular, has a manufacturing lead that allows it to be the "low cost, high volume" producer at good margins. While NVIDIA is obviously going to try to gain as much business as possible, it is likely that Tegra K1 will be a fairly expensive chip (given its performance level), meaning that it'll be quite high margin and probably find its way into more "premium" Android tablets while others focus on the lower end/higher volume devices – where visual computing isn't as important.

Foolish bottom line
NVIDIA looks to have done a spectacular job with Tegra K1, going all-out to build a graphics-performance focused part on TSMC's 28 nanometer process. It will be exciting to see how Tegra K1 fares next year – it'll certainly do much better than Tegra 4 and, frankly, it's probably the most compelling mobile system-on-chip currently announced today. It's a great time indeed to be an NVIDIA shareholder.

More compelling ideas from the Motley Fool
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multi-billion dollar industry. Our analysts have done it before with the likes of Amazon and Netflix. And now they think they’ve done it again with three stock picks that they believe could generate the same type of phenomenal returns. They’ve revealed these picks in a new free report that you can download instantly by clicking here now.

Ashraf Eassa owns shares of Intel and Nvidia. The Motley Fool recommends Intel and Nvidia. The Motley Fool owns shares of Intel and Qualcomm. Try any of our Foolish newsletter services free for 30 days. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers