Why are the market dynamics different this time? Because NVIDIA CEO Jen-Hsun Huang sees a multiyear era of strong PC gaming starting right about now.
The leading video-game consoles from Microsoft
In this market assessment, Huang forgets to mention that Nintendo's next-generation Wii U hits store shelves next year. While the graphics hardware in that update lags behind the latest and greatest on the PC side, it's an upgrade over the last generation's finest pixel pushers. And when you're designing games for one well-defined hardware platform, you can often squeeze more performance out of the hardware than PC generalists who must cater to unending variations and combinations.
Moreover, Sony hasn't announced or leaked any PlayStation update plans yet, but rumor has it that the next Xbox is due by the 2013 holiday season.
Maybe this hardware cycle is shorter than Huang expects.
In the meantime, NVIDIA's non-GAAP earnings jumped 75% year over year to $0.35 per share on 26% higher sales. That groundswell of PC-gamer demand is helping at the moment -- I just wouldn't bet on it as a long-term growth driver.
Instead, NVIDIA's Tegra processors are showing up in increasing numbers of smartphones and even more non-iPad tablet computers. "NVIDIA's strategy is coming into its own, as the world becomes increasingly visual and mobile," Huang enthused, and I think he's right on the money this time.
It's not all smooth sailing. For example, Texas Instruments
In the long run, I think we can pretty much forget about NVIDIA, the graphics expert, and say hello to NVIDIA, the mobile mastermind. Learn more about the smartphone and tablet revolutions by grabbing this free, hot-off-the-presses report. Among other things, it will show you three other stocks poised to ride the revolution to rich share returns. Get your copy right now.
Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Texas Instruments and Microsoft. Motley Fool newsletter services have recommended buying shares of Nintendo, Microsoft, and NVIDIA, and also recommended creating a bull call spread position in Microsoft and writing puts on NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.