The S&P dropped the ratings outlook on NVidia’s stock from “positive” to “stable”, based on slumping revenue and increased competition in the market from chips like Intel’s Larrabee.
S&P noted that graphics-chip life cycles are very brief, contributing to revenue and earnings volatility. Nvidia is trying to expand into graphics-enabled cellphones and other handheld devices, as well as supercomputer applications. But the ratings firm noted revenue from such ventures is small.
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Nvidia also experienced some manufacturing problems in mid-2008, followed by a delayed product launch and increased competition from rivals at the end of the year. This, combined with a sharp decline in personal-computer sales, has hurt the company’s revenue.
Nvidia shares were up 0.8% to $9.86 in recent trading.
via Article – WSJ.com.
