Nvidia up as analyst says chip supplies tight
Nvidia Corp. shares rose Tuesday after a Raymond James analyst said chip supplies are tight and Wall Street is underestimating the maker of graphics chips.
Nvidia "remains a controversial name in the near term," Hans Mosesmann wrote in a note to investors. He said the stock "presents an opportunity as the Street appears to significantly underestimate the momentum in new products for 2010" as well as "upward movement in gross margins."
Nvidia, a Santa Clara, Calif., company that makes graphics chips for powering video games and other applications, ended its fiscal 2009 with a surge in revenue after a dismal year for semiconductor makers across the industry.
The recession sapped demand for the personal computers and other gadgets that run on Nvidia's chips. But revenue has started to turn around, more than doubling to $982 million in the three months ended in January.
In his note Tuesday, Mosesmann said Nvidia expects that demand will continue to outstrip supply, with customers holding enough inventory to last about five weeks compared with the normal 10 to 12 weeks.
The company's stock was up 74 cents, or 4.4 percent, to $17.66 in afternoon trading. The stock has ranged from $8.28 to $18.96 over the past year.
Copyright 2010  AP News
