If you were about to write off NVIDIA
Yesterday, the graphics chipmaker reported a stronger-than-expected increase in third-quarter sales of 14% to $486.1 million. The company said that gross margins had bottomed out, and that seasonally weak fourth-quarter sales would be flat with the third quarter. As a result, NVIDIA shares are up 20% to $21.66 in early morning trading.
But business hasn't always been so hot.
Back in 2001, NVIDIA was a darling in a rough market. It had snatched up former Rule Breaker 3dfx, and was ready to bear the fruits of the Microsoft
More recently, Microsoft announced that rival ATI Technologies
But NVIDIA's core business is improving, with platform processor revenues rebounding 60% sequentially. That in itself probably didn't surprise anybody, as others have reported strong summer PC sales, and NVIDIA supplies Dell Computer
So not only are things not getting worse, they look better. Xbox 2 is a tough loss, but it might just be too early to call the end of NVIDIA the way NVIDIA ended 3dfx. The shares don't look cheap at first glance, but they rarely do. And anything can happen in the potentially explosive graphics chip business.
Like NVIDIA? Hate NVIDIA? Knock it around on our NVIDIA discussion board.
Jeff Hwang can be reached at JHwang@fool.com.
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