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

[HTC]

I don't think (at least personally) it has anything to do with Crypto.
A couple of years back Softbank and several other tech giants have invested lots of money into AI and AI-related industries (through their Vision Fund, and with some help from Saudi's PIF).
Most of these fields conflict with what's NVidia been doing for the past few years.
So, even though Softbank owns 5% of NVidia, they are probably more content with "cutting losses" by selling NV stock at pretty much the same price of what they paid back in 2017, and trashing it even further on the stock market to get some freedom in pushing their own agenda in the field of AI.

https://www.forbes.com/sites/samshe...ting-97-of-time-and-brain-to-ai/#23733d69537d

Something doesn't seem right: they won't be getting "pretty much the same price" because they will in fact make a $3B profit.

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.

Between the "fall of crypto" and the "warm reception" of RTX line of cards, i was expecting some sort of hit to strike nVidia but it never crossed my mind something of this magnitude.

 

[dalekdukesboy]

Well, this is what you get for screwing over your customers and your board partners. The performance gains from GTX 1080Ti to the RTX 2080 were almost non-existent. Yet they sold the RTX 2080 at a higher price than the GTX 1080Ti. As for the RTX 2080Ti, high failure rates + a massive price gouge left a bad taste in many long time Nvidia fans' mouthes. And after dumping a ton of unwanted GTX overstock onto their partners, its no wonder people are getting sick of their shit.

I saw the rest of the "in the weeds" type analysis others gave with cryptomining and investments with other companies etc etc....but when you make video cards and that's about it....well I think this answer probably has the MOST to do with stocks tanking. Let's not forget the 1080 series was way overvalued for a while due to cryptomining so this trend probably started a long time ago and Nvidia just solidified it and increased the free fall with a relatively inferior product to "upgrade" to on a manufacturing node too big to make use of it, AND as insult to injury to the negligible efficiency savings compared to 1080 gen. they charged way too high a premium for a product that just isn't that much better than last generation. There's a sucker born every minute, but not enough willing to overpay and overinvest in a company that is under performing.

 

[silentbogo]

Something doesn't seem right: they won't be getting "pretty much the same price" because they will in fact make a $3B profit.

That's only a speculation, cause no one really knows exactly when they've acquired their 4.9% share.
The announcement was made on May 24, 2017, the initial price could've been anywhere between $127 to $138 that week. Today it stands at $148 and keeps going down, which means since Softbank didn't make any moves yet, they can only rake up at most 15% profit.

 

[HTC]

That's only a speculation, cause no one really knows exactly when they've acquired their 4.9% share.
The announcement was made on May 24, 2017, the initial price could've been anywhere between $127 to $138 that week. Today it stands at $148 and keeps going down, which means since Softbank didn't make any moves yet, they can only rake up at most 15% profit.

Then it's speculation by numerous outlets:

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.

Perhaps those outlets all have the same source? Dunno.

 

[silentbogo]

Perhaps those outlets all have the same source? Dunno.

Nowadays everything is possible
AFAIK those "numerous sources" boil down to Bloomberg.

Fortune magazine was a bit more pragmatic in their reporting:

Bloomberg quoted sources as saying the investment could yield Softbank $3 billion. In the past ten weeks, Nvidia has given up nearly all of the stock gains it earned since it was reported that Softbank bought a stake in the chipmaker. Should the stock—long beloved by speculators, who tend to grow fickle during market selloffs—continue to decline into 2019, it could prompt Softbank to part with a stock that was one of its prized investments only a few short months ago.

The only way they could've made $3B profit, is if they bought all of that back in May 2016, or if they elbow-twisted Jensen Huang and the green board into selling nearly a quarter of Nvidia to Softbank, or if they already sold it back in October and just not telling anyone )))

 

[FreedomEclipse]

Raytracing isn't a simple post-processing filter you can make feasible with just software work. Go that route you've proposed and you're just creating a circular problem: Devs won't release RTRT renderers because it's not feasible because no hardware can run it, no hardware for RTRT will be made because no software for it exists, software won't be created because no hardware exists, ad infinitum.
What Nvidia did, no matter how many "WTFs!" and "Greedy bastards!" I've personally exclaimed, was an attempt that really deserves an applause (even if it wasn't the most economically efficient route). Releasing the RTX cards broke that cyclical problem and left the ball entirely in the game/engine/renderer developers' field.

And I don't really think any early adopter of a cutting-edge tech that is clearly in its infancy should complain about being "short changed."

I 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.

And I don't really think any early adopter of a cutting-edge tech that is clearly in its infancy should complain about being "short changed.

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.

 

[TheDeeGee]

Maybe drop prices by 50% so everything is affordable and back to normal pricing of 10 years ago.

 

[Deleted member 177333]

Happy to hear it, along with the "not glamorous" reception for Turing. With the joke of a price / performance scheme on the Turing GPUs, I hope they keep sinking and losing as many investors as possible. If I owned individual NVidia stock I would have dumped it all as well a few months ago. #karma

Maybe drop prices by 50% so everything is affordable and back to normal pricing of 10 years ago.

No doubt. It's been a while since I searched the Turing GPUs, but just taking a quick glance at newegg and evga just now, I'm seeing 2080 Ti cards that are priced anywhere from $300 to as high as $700 over what, IMO, they should be priced at given their performance.

It's just unbelievable to me how they could release these cards and think they would sell well. Of course investors are going to bail.

 

[Xzibit]

Nowadays everything is possible
AFAIK those "numerous sources" boil down to Bloomberg.

Fortune magazine was a bit more pragmatic in their reporting:


The only way they could've made $3B profit, is if they bought all of that back in May 2016, or if they elbow-twisted Jensen Huang and the green board into selling nearly a quarter of Nvidia to Softbank, or if they already sold it back in October and just not telling anyone )))

It was a collar trade.

If SoftBank sells its Nvidia share, it is still like to make $3 billion from the deal, as it constructed a “collar-trade” to protect against a share price decline.

 

[Steevo]

Perhaps Nvidia is buying the shares back at a set price and they set that price before their stock took such a hit.

Nvidia has failed at many things, and really succeeded at a few, graphics, and AI has been good to them, but their failures and the fact we have AI to design new AI hardware that can be built with truly custom silicon from many companies means that tide is turning too. I don't think this is any sort of a death toll for them, but it should sound a warning they need to reign in some of their projects as leaner years are ahead.

Or..... This is a move before they get bought, or sell some piece, start gathering their shares and run them into the ground to pay less.

 

[TheoneandonlyMrK]

You understand a hell lot of people were buying GTX cards and now the RTX is out at a greater cost of which the GTX was already expensive in the first place, and to add to it it supports some thing that is not available and even if it was available cannot do it on a large scale.

A lot will just buy secondhand.

Exactly, the demand for cutting edge visual effects begins and ends with pc enthusiasts, their just isn't enough in that pot to keep Nvidias shareholders happy, until they have a reasonable price , viable option their F##@ed.

Because 95% of gamer's would/will game smiling with a 1080-ti- vega - even cheaper, shit a lot if people game on intel if y'all only ever look at steam, they aren't buying.

 

[Keullo-e]

You understand a hell lot of people were buying GTX cards and now the RTX is out at a greater cost of which the GTX was already expensive in the first place, and to add to it it supports some thing that is not available and even if it was available cannot do it on a large scale.

A lot will just buy secondhand.

Yeah, of course there's inflation etc, but..

Release prices for the high-end cards in last few generations (from Wikipedia, and if a card has a FE model, I've listed its price)

GTX 480, 499 usd
GTX 580, 499 usd
GTX 680, 500 usd
GTX 780, 649 usd
GTX 980, 549 usd
GTX 1080, 699 usd
RTX 2080, 799 usd

GTX 780 Ti, 699 usd
GTX 980 Ti, 649 usd
GTX 1080 Ti, 699 usd
RTX 2080 Ti, 1199 usd

Titan, 999 usd
Titan Black, 999 usd
Titan Z, 2999 usd (well, it was a dual-GPU card)
Titan X, 999 usd (Maxwell)
Titan X, 1200 usd (Pascal)
Titan Xp, 1200 usd
Titan V, 2999 usd
Titan RTX, 2499 usd

 

[Mescalamba]

Arent 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.

 

[jboydgolfer]

Hopefully we see some price slashing, who knows, maybe ill be able ot afford a top tier Nvidia GPU for the fist time in 10+ years

 

[XXL_AI]

The thing is they never needed to invest in production of more and more pascal gpus. They did and they crashed. If they spent time on developing powerful but low-power AI solutions it would have been another graph we're seeing on the stock market. I don't get the reason behind why they don't want to release a 1W NN processor.

 

[Fluffmeister]

Arent 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.

Indeed, the Donald is causing chaos and stocks naturally go up and down like a Bush Gardens rollercoaster anyway. AMD were down to like 2 bucks and make a profit for their investors and shareholders once every 5 years, yet last time I checked they are still in business.

Some random investor says jump, and the market says how high? Meh.

 

[TheGuruStud]

I 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.

Bethesda is literally using a 12 yr old (iirc) engine lol. It will never support anything except crashes.

 

[fullinfusion]

Honestly this was talked about last year and how the crypto fall would hoop companies... Now how is the green team going to pay off that huge ass building? Do I feel sorry for them? yeah I do but then again what comes around goes around so take it with a grain of salt... This is just a slight bump in the road.. They have a good business and will recover before long.

 

[Xzibit]

Honestly this was talked about last year and how the crypto fall would hoop companies... Now how is the green team going to pay off that huge ass building? Do I feel sorry for them? yeah I do but then again what comes around goes around so take it with a grain of salt... This is just a slight bump in the road.. They have a good business and will recover before long.

By raising prices.

 

[fullinfusion]

By raising prices.

Na by all the used mining cards flooding the market, plus all the RMA's that is going on due to the cards being mined.

 

[Ravenas]

The industry knows that AMD is about to drop a bomb on the GPU market in Q1 19 with extremely low priced units that directly compete with the 2080, 2070, and 2060. People aren't going to adopt features like Ray Tracing when it costs $700-1300 to access. That's not mainstream.

 

[FordGT90Concept]

NVIDIA'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.

 

[fullinfusion]

NVIDIA'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.

who wants a car smashing into a barricade lol, next!

 

[Midland Dog]

time to invest? how does tpu rate my plan?

 

[Fabio]

Raytracing isn't a simple post-processing filter you can make feasible with just software work. Go that route you've proposed and you're just creating a circular problem: Devs won't release RTRT renderers because it's not feasible because no hardware can run it, no hardware for RTRT will be made because no software for it exists, software won't be created because no hardware exists, ad infinitum.
What Nvidia did, no matter how many "WTFs!" and "Greedy bastards!" I've personally exclaimed, was an attempt that really deserves an applause (even if it wasn't the most economically efficient route). Releasing the RTX cards broke that cyclical problem and left the ball entirely in the game/engine/renderer developers' field.

And I don't really think any early adopter of a cutting-edge tech that is clearly in its infancy should complain about being "short changed."

no, you broke the circle with standards. If you really want you have to build up a consortium, nvidia, amd, intel, software dev and decide standard, metodica etc etc.
What nvidia done is, and always will be another game works gimnic that 10% of games will support