Monday, January 28, 2013
NVDA - A Dark horse for Smartphone/Tablet play?
Most people know of Nvidia for its Graphics Processing Units (GPUs) where it has over 60% market share and is designed into the latest Macs. Not many however realize that it has made significant inroads into the mobile space with Apps processors designed for Tablets and Smartphone markets. It has had reasonable success claiming about 1/3 market share of non-iPad tablet sales. Tegra 3 which was its lead product for 2012 has been designed into Google Nexus 7 and Microsoft Surface. Nvidia announced Tegra4 at CES earlier this month. The leaders ofcourse in mobile apps processor market are Qualcomm with its Snapdragon line, Apple with its A5/A6 processors used in iPhone/iPads and Samsung with its Exynos processors used for Galaxy tablets. While competition is tough, its a growing market and Nvidia is expected to play significant role especially in the low to mid tier of the market with tier of OEMs that would focus on products for emerging markets.
The chart pattern on NVDA is turning bullish going into the earnings on Feb 14. While Q4 earnings are not typically the best, there may be likelihood of some surprise in the forward guidance given the growing traction with its new products. Options activity on the stock has also been very bullish last few days pointing to strong earnings. My first target is 13.15 and over that is should easily see $14-$15 in short term.
Here's the daily chart and today's option activity -