All posts from Zacks
Zacks in Our Research. Your Success.,

Nvidia Slips Ahead Of Earnings As Intel Hires AMD Exec

Shares of Nvidia NVDA dipped on Thursday morning, just hours before it is set to release its Q3 earnings report. The slump came after Intel INTC announced that it hired one of Advanced Micro Devices’ AMD top systems architects to help Intel compete in the quickly growing graphics chip market.

Nvidia grew to prominence based largely on the success of the company’s high-powered graphics chips, which are a favorite among PC users—and video gamers more specifically—around the globe.

Over half of the semiconductor company’s revenues come from its Gaming division, which is driven by these graphics chips (also read: Will Gaming Remain Dominant For Nvidia In Q3?).

Now, Nvidia’s much larger rival, Intel, is fighting to make inroads in the market Nvidia currently dominates.

Intel announced on Wednesday night—less than 24-hours before Nvidia is set to report its third-quarter results—that it hired Raja Koduri. The former top graphics architect at AMD will take on the role of “chief architect and senior vice president of the newly formed Core and Visual Computing Group and general manager of a new initiative to drive edge computing solutions,” according to an Intel press release.

Koduri will leave his role at AMD, where he was most recently the senior vice president and chief architect of the Radeon Technologies Group. In that role, he oversaw “all aspects of graphics technologies used in AMD’s APU, discrete GPU, semi-custom and GPU compute products.”

The news of the big hire, which is intended to help Intel compete more directly in a graphics market dominated by Nvidia, helped send shares of Nvidia down more than 2%.

On top of that, shares of AMD sunk by over 5% on Thursday morning after word spread that Intel was able to lure one of its most important executives away. This also comes only days after AMD’s shares popped following the announcement that it is set to partner with Intel to compete against Nvidia in the laptop chip market.

"Our collaboration with Intel expands the installed base for AMD Radeon GPUs and brings to market a differentiated solution for high-performance graphics," Scott Herkelman, an AMD VP, said in a statement.

"This new semi-custom GPU puts the performance and capabilities of Radeon graphics into the hands of an expanded set of enthusiasts who want the best visual experience possible."

Bottom Line

The graphics chip market is set to get more competitive than ever with these recent moves. Thankfully for Nvidia investors, the company has made strides in driverless vehicle technology, the artificial intelligence sector, and datacenters.

Nvidia is set to release its Q3 earnings after the closing bell. Based on our current consensus estimates, the company’s earnings are set to jump 13%, while revenues are expected to soar 18% year-over-year.

Be sure to check out our full guide for more details ahead of Nvidia’s earnings report: What To Expect From Nvidia's Q3 Earnings Report.

And make sure to check back here for our full analysis of Nvidia’s actual results later this week!

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
Intel Corporation (INTC): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research