That reaction seems to defy logic until you look a little closer at NVIDIA's report. The bottom-line damage is largely explained by a couple of one-time charges -- one for unusually large inventory write-offs and the other due to the costs of shipping products in 2008 in bad packaging. Back all of that out and you'll get a non-GAAP profit of $0.03 per share.
"Rapidly changing market conditions made for a challenging quarter," said CEO Jen-Hsun Huang. Memory prices are up, demand for stand-alone graphics cards is down, and NVIDIA was stuck with tons of unsellable chips. Despite today's gains, the share price is not back to where it was before the company lowered its revenue guidance a couple of weeks ago.
At the same time, NVIDIA is now paying license fees to Rambus
NVIDIA reported a weak market starting in late May. Cisco Systems'
We're talking about a Motley Fool Stock Advisor pick and five-star CAPS stock here, and my own thumbs-up vote from last September is hemorrhaging CAPS points. But I don't see much reason to cheer for NVIDIA today. Advanced Micro Devices
Go forth and make your own analysis of NVIDIA known to the CAPS world. It only takes a few clicks and won't cost you a thin dime.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Activision Blizzard and NVIDIA are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a synthetic long position on Activision Blizzard. The Fool owns shares of Activision Blizzard. Try any of our Foolish newsletter services free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.