In 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.
Charlie Demerjian
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