Over the weekend, NVIDIA (NVDA 1.40%) stunned many investors with its unveiling of Project Shield, its new gaming system. However, while Project Shield will be getting much of the press attention this week, it'll have little impact on the company's overall stock performance in 2013.
We've created a premium report on NVIDIA that looks at the key long-term factors that will affect the company in the year ahead. We hope you enjoy this excerpt, which examines at five key catalysts facing the company.
- Integrated graphics performance: There will always be a market for discrete GPUs among serious gamers and enthusiasts. However, integrated graphics remains a threat. For example, Intel's (INTC 4.50%) latest Ivy Bridge chips have seen graphics performance up to 41% better than the previous generation Sandy Bridge processors. AMD's (AMD 2.95%) Llano processors outperform Ivy Bridge by 33%. The threat that these CPUs pose is commensurate with their improvements in integrated graphics performance.
- Tegra "Grey" release: The launch of a Tegra chip with integrated LTE will be a momentous occasion for NVIDIA, one that will give the company a new level of legitimacy in challenging Qualcomm's (QCOM +0.02%) dominant lead in the market. In some cases, NVIDIA has been forced to split design wins (like the HTC One X) with Qualcomm when OEMs want integrated LTE variants for certain markets. With "Grey," NVIDIA could potentially score those spots exclusively.
- Competition with Intel: NVIDIA and Intel historically sold complementary products, but rivalry between the two will only increase in the future. In January 2011, NVIDIA scored a six-year cross-licensing agreement with Intel, earning it $1.5 billion in licensing fees payable in five annual installments. However, the two companies will see competition intensify in supercomputers, mobile applications processors, and baseband modems.
- PC market: As NVIDIA's largest segment, GPU sales into the PC market remain incredibly important to the company's overall results. If growing Tegra sales merely offset GPU declines, the net result may be little to no sales growth. NVIDIA is intent on diversifying away from the PC market and into mobile devices, but this transition is still a work in progress.
- Tegra tablet wins: The tablet market is ripe with growth, and NVIDIA is set to capitalize on the non-iPad segment. Important wins like the Nexus 7 and Surface RT are just the beginning. There will be an entire wave of Tegra-powered Windows RT devices and new Android tablets in the near future.
