Nvidia profits are up in a fragile way

Analysis: Direction changes for no apparent reason once again

Nvidia logoIn their Q3/FY16 analyst call, Nvidia shifted their business model significantly away from what it was. This was heralded as a massive win for the company but it is a lot more fragile a state than they would like to be in.

This new shift into automotive, VR, and datacenter was spun as a vast untapped market but the real news was the markets that are tapped out for the company. This change, and it is quite fundamental, is not a surprise to SemiAccurate readers. We called this one just like we called their shattering defeat in the IP lawsuit market. (Note: It is under appeal, we know that, but so far it has been dead on to our predictions.)

On a nice note, Nvidia’s gaming/GPU sales did great this quarter, up 16% Q/Q and up 12% Y/Y, quite the solid gain. Balancing this out was a mild decrease in Pro Visualization and Datacenter, a decent increase in Automotive, and a massive decline in PC/Tegra OEM/IP revenue, all Y/Y. So what changed, and what does it really mean? Lets take a look at it mostly in their own words.

Note: The following is analysis for professional level subscribers only.

Disclosures: Charlie Demerjian and Stone Arch Networking Services, Inc. have no consulting relationships, investment relationships, or hold any investment positions with any of the companies mentioned in this report.

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Charlie Demerjian

Roving engine of chaos and snide remarks at SemiAccurate
Charlie Demerjian is the founder of Stone Arch Networking Services and SemiAccurate.com. SemiAccurate.com is a technology news site; addressing hardware design, software selection, customization, securing and maintenance, with over one million views per month. He is a technologist and analyst specializing in semiconductors, system and network architecture. As head writer of SemiAccurate.com, he regularly advises writers, analysts, and industry executives on technical matters and long lead industry trends. Charlie is also a council member with Gerson Lehman Group. FullyAccurate