Friday, December 14th 2018

NVIDIA's Stock Has Been Plunging Since October; Softbank Reported to be Looking for a Way Out

by
Raevenlord
 Discuss (71 Comments)
The stock markets are the financial equivalent of a fickle mistress. Just ask NVIDIA. The company has, in recent months, introduced their Turing architecture and derived products - a move NVIDIA deemed such a significant leap over its previous generations that it prompted a change from the GTX of old to a new RTX moniker. The company's latest financial results also reported a 21% increase in revenue YoY, and a 2% increase relative to the last quarter. Despite this and increased cash dividends being delivered to the hands of investors, festive must not be NVIDIA's mind right now.

The dive, which practically halved the company's stock valuation since October, moving from an all-time peak of $289.36 on October 1, to just under $149 (a 48.8% decline). This fall has mostly been attributed to the crypto slump, which left NVIDIA with excess inventory in its channels and may have pushed some of the company's plans for their 2000 series over the edge - particularly in the midrange graphics department. However, overall reception of their RTX 2000-series cards wasn't all that glamorous - and that surely moved investors' minds as well. Now, it appears that Softbank, one of the tech world's giants, is pulling its weight from NVIDIA and racking in a $3 billion profit, as is being reported by numerous outlets. Apparently, the deal isn't finalized as of writing, but that must be rocking NVIDIA's boat all the same.
Sources: Bloomberg, via TechSpot

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71 Comments on NVIDIA's Stock Has Been Plunging Since October; Softbank Reported to be Looking for a Way Out

#51
olymind1
TheDeeGeeMaybe drop prices by 50% so everything is affordable and back to normal pricing of 10 years ago.
In my country the 1050 TI 4 GB costs the same as an RX570 4 GB... :laugh: My wallet and I still like AMD better. :)
Posted on Reply
#52
LyuboA
and now with bumping prices with 100% even more in EU ppl were buying at those prices to mine crypto but NVIDIA thinks they can just keep these prices without the mining demand hahha thats why no one buy 2080 and 2080 Ti and they lie ooo 2080 Ti is $1200 cause replaces Titan but we now get Titan for again more then 100% more money $2500 No one will buy that expensive cards hope AMD comes with something powerfull so NVIDIA can wake up just like they did with intel
in my country less then 10% of 1080 Ti owners have gotten 2080 or 2080 Ti even less ppl will buy replacing 1080 or 1070
Posted on Reply
#53
Vayra86
FreedomEclipseI should of added that RTX cards should of been handed to developers to play around with and develop games for before the card was released to the general public -- that was the point i was getting at....

Then we have a half finished product like BF:5 where Ray Tracing felt like it was tacked on to the game at the last second and EA/DICE delaying the initial launch and the first major patch for the game proved my point. Either EA was putting a whole lot of pressure on DICE to get the game out of the door or Nvidia gave them samples of RTX cards really late into the games production that they didnt have time to focus on it to get it running smoothly.

Thats what i meant by making sure the software was available first before dropping the bomb.... Imagine spending your hard earned money on an RTX2080 and having games available from day 1 with graphical fidelity that would make your Jaw drop...

Instead we have people that think they overpaid for the card, most people dont even want to touch the RTX cards because it doesnt outright outperform the previous gen for the extra money you pay and none of the features are REALLY supported out of the box by developers and the only ones that do are ether a tech demo and a half finished game which sales for that game are bombing anyway.



People will still complain.... You may not, but a lot of people will when there are people who sing and dance about picking up a pre-owned 1080Ti and getting similar performance because there were no games available that made use of RTX/DLSS during initial launch.

Ray Tracing is a gamble.... And we all know how slow the industry takes to change... How many games were made with DX10 support when it was released?? How long did it take developers to jump on DX11?? and now the next mountain to climb is DX12 and there arent a lot of games that support DX12. Not even fallout or Skyrim supports DX12. Call of Duty BLops 4 is DX11....

And how long has Windows 10 been out and DX12 been a thing??? Ray Tracing isnt something thats going to be adopted overnight.

It was a big gamble for Nvidia and they probably predicted their stock price to tumble because of it.
I completely agree except for that last line. I can fully imagine that in Nvidia's view, they really were bringing that holy grail and really did offer an interesting proposition with the technology, simply because they have the market domination and performance crown. They carved out their own little monopoly on the high end, and RTX is just another step up. Why wouldn't it work, when 1080ti's are flying off the shelves and no one has an answer to it? They win anyway; either by selling old Pascals or by selling overpriced Turing. And today, they even still win because those overpriced 1080ti's are probably still going out at some point, and when they're gone, Turing is all you got. Already there are tons of people saying 'got an RTX2080, because 1080ti was too expensive'... omitting that the 1080ti got a huge price bump recently. 'Screw Nvidia, I'm going to buy Nvidia either way'... this is why people should skip Turing entirely IMO - simply on the principle of not getting played like that as a customer.

The real gamble for Nvidia is their deep learning, automotive and cpu endeavours. Those have so far all costed them a shitload of money, and only datacenter/deep learning really pays off for them. Those gaming GPUs will sell, either with a premium (Pascal launch > today) or without it (they can easily slash the price).
Posted on Reply
#54
FreedomEclipse
~Technological Technocrat~
Vayra86I completely agree except for that last line. I can fully imagine that in Nvidia's view, they really were bringing that holy grail and really did offer an interesting proposition with the technology, simply because they have the market domination and performance crown. They carved out their own little monopoly on the high end, and RTX is just another step up. Why wouldn't it work, when 1080ti's are flying off the shelves and no one has an answer to it? They win anyway; either by selling old Pascals or by selling overpriced Turing. And today, they even still win because those overpriced 1080ti's are probably still going out at some point, and when they're gone, Turing is all you got. Already there are tons of people saying 'got an RTX2080, because 1080ti was too expensive'... omitting that the 1080ti got a huge price bump recently. 'Screw Nvidia, I'm going to buy Nvidia either way'... this is why people should skip Turing entirely IMO - simply on the principle of not getting played like that as a customer.

The real gamble for Nvidia is their deep learning, automotive and cpu endeavours. Those have so far all costed them a shitload of money, and only datacenter/deep learning really pays off for them. Those gaming GPUs will sell, either with a premium (Pascal launch > today) or without it (they can easily slash the price).
Reason why 1080ti got a price bump is because they are no longer in production and stock is dwindling
Posted on Reply
#55
Vayra86
FordGT90ConceptNVIDIA's stocks surged because of deep learning/machine learning/AI. When Tesla announced they would no longer be buying NVIDIA cards because they were switching to an in-house ASIC, that's when NVIDIA's shares started to slide: investors realized NVIDIA has a lot of talk but not much game.

NVIDIA's stock took another dive when RTX debuted and was clear it was not a hugely profitable venture for them (expensive to produce and cards are priced so they won't sell).

Cryptocurrency taking a dive and NVIDIA partners being left with a lot of stock caused another sell off.

The final blow is tech stocks in general slumping because of the looming recession.

By my count, that's four major blows in the space of a few months. Investors are only looking for growth and NVIDIA doesn't seem ripe for growing right now. AMD does. Investors are a fickle bunch that have no loyalty. They go where the money is.
+1

Its funny because Nvidia should have learned by now. Its not like Tegra has been doing them favors... There are a lot of similarities with Intel here - a certain arrogance about 'taking over new markets'. Tegra was the first dualcore smartphone SoC. That is quite a prestigious move to make for a newcomer. Nvidia pushed Tegra in every iteration as a greater performance part to the competition. Result: an expensive product. Turing is the same sort of arrogance - 'we will decide what RTRT looks like'.
FreedomEclipseReason why 1080ti got aa price bump is because they are no longer in production and stock is dwindling
Yes, so? It doesn't matter why, what matters is that any upgrade path right now screws you over.
Posted on Reply
#56
Ubersonic
xkm1948Crypto mining took off, gamers suffer. Crypto mining collapse, GPU maker suffer.
That has nothing to do with it, crypto mining has been around for nearly a decade with numerous ups and downs and it favours ATi/AMD cards anyway.

This is simply a case of Nvidia releasing a new gen of cards priced at double what they're worth, then killing off their previous gen to force people to buy them, and consumers/the market reacting accordingly.
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#57
bubbly1724
But I thought the more you buy the more you save?
Posted on Reply
#59
etayorius
Don't worry, nVidia will survive... after all, there are millions of blind nVfangirls willing to spend tons of cash for what ever useless gimmick or shady and anti consumer tactic.
Posted on Reply
#61
FordGT90Concept
"I go fast!1!11!1!"
Tesla was similar. Meteoric rise for reasons with an inevitable sell off because obvious. The whole DJIA rising to 24,000+ was powered by those kinds of trades and plummeted when the inevitable selloff occurred.
Posted on Reply
#62
stimpy88
xkm1948Crypto mining took off, gamers suffer. Crypto mining collapse, GPU maker suffer.

Conclusion: kill crypto mining with extreme prejudice
I'll fix that for you...

"Crypto mining took off, gamers suffer. Crypto mining collapse, Gamers suffer even more under extreme price hikes."

Conclusion: Kill customers with extreme prejudice
Posted on Reply
#63
Captain_Tom
MescalambaArent stock markets sorta in bad place in general?

Gaming industry has some hiccups too. Activision is down what, -44%?

Just some recession probably. Well, correction, really.
AMD isnt. TSMC isnt. Plenty of other companies are doing just fine.

Nvidia is going through the same thing AMD did in 2014 when they overproduced for mining. Even worse is the fact that Nvidia's entire rediculous valuation came with the assumption Nvidia would always have a stranglhold on pc gaming, and then dominate self diving.

Well that's not gonna happen. Nvidua has 75% of one market, and Navi is on the way. Even worse is their complete failure to dominate AI.
Posted on Reply
#64
mtcn77
Captain_TomAMD isnt. TSMC isnt. Plenty of other companies are doing just fine.

Nvidia is going through the same thing AMD did in 2014 when they overproduced for mining. Even worse is the fact that Nvidia's entire rediculous valuation came with the assumption Nvidia would always have a stranglhold on pc gaming, and then dominate self diving.

Well that's not gonna happen. Nvidua has 75% of one market, and Navi is on the way. Even worse is their complete failure to dominate AI.
And tablets...
Posted on Reply
#65
Fluffmeister
Prices will drop once AMD provide competition, I hope Vega 20 will be great competiton for poor Volta, in the meantime lets all group hug and have a BBQ.
Posted on Reply
#66
Frick
Fishfaced Nincompoop
TheGuruStudBethesda is literally using a 12 yr old (iirc) engine lol. It will never support anything except crashes.
Yes, but to be fair these old engines are updated a lot. See Paradoxs Clausewitx engine.
Posted on Reply
#67
rtwjunkie
PC Gaming Enthusiast
Ubersonicit favours ATi/AMD cards anyway.
You’re behind the times. That was before. Last year’s boom, from what I understand, favored multiple Nvidia offerings.
Posted on Reply
#68
FreedomEclipse
~Technological Technocrat~
Vayra86+1
Yes, so? It doesn't matter why, what matters is that any upgrade path right now screws you over.
It just depends how much you have to have the best... Sometimes the best upgrade is not to upgrade. 1080Ti's might be out of production but i see a healthy amount of 1080's, 1070s and 1060s Still in stock -- At least it is here in the UK.

Or just upgrade other things or smaller things... what I call QoL upgrades and wait it out till prices drop or AMD comes out with serious competition.
Posted on Reply
#69
kanecvr
olymind1In my country the 1050 TI 4 GB costs the same as an RX570 4 GB... :laugh: My wallet and I still like AMD better. :)
Same here. It's interesting how nvidia is asking the same ammount of money for a 1050ti as AMD is asking for the much faster RX 570... I tried the 1050ti - it's a steaming pile of crap. The RX 570/GTX 1060 3GB are the slowest cards that can do 1080p / High with a bit of AA confortably.
Posted on Reply
#70
medi01
olymind1In my country the 1050 TI 4 GB costs the same as an RX570 4 GB... :laugh: My wallet and I still like AMD better. :)
I bet 1050Ti still sells better.

Why people keep repeating "mining" as the reason is beyond me.
How did all that start? AMD was lost in action anywhere beyond low end.
nVidia sold 330mm^2 chips for the price of 400-550mm^2 chpis. (Pascal)
And then there were promises of "automotive" business, "data center" business (billions spent on Tesla chip to get 0.5 billion revenue, nice investment).
With all that stuff, nVidia's revenue was at "wopping" 20% of Intel's, with the same 60%+ margins as INTC.

We got to a point when even die hard "80Ti" buyers who kept buying them at release date got their WTF moment.

Soo... what gives? Why was NV's mcap at nearly Intel's level please?
Posted on Reply
#71
mtcn77
By the Jensen!
NVIDIA, which fell from $289.36 per share as on October 1, to around $135.1 as of now, a 53% decline, but a roughly $150 billion erosion in value over a span of just 3 months.
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