7 ms·

As a non-crypto-mining consumer, I've been frustrated by the price increase for video cards, and perhaps that frustration impacts Nvidia in the long run. But r

As a non-crypto-mining consumer, I've been frustrated by the price increase for video cards, and perhaps that frustration impacts Nvidia in the long run. But really, when crypto was booming, what was Nvidia supposed to do? They were the guys selling shovels and pickaxes when the gold rush was in full swing. They rode the bubble and reaped the benefits when they could. So the price drop doesn't necessarily reflect a failure of strategy on their part. What I'll be curious to see going forward is what Nvidia does with the cash from their bumper year. If the end result of this saga is that Nvidia lined their coffers and invested in R&D for the next generation of of video cards, that bodes extremely well for the company.

ianlevesque 8y ago
They did openly tell investors the cryptocurrency decline was coming too.
- r00fus 8y ago
  They should’ve had a plan in place to transition maybe?
  - danhak 8y ago
    What sort of transition, exactly? Their core business is intact and they're strongly positioned in AI and autonomous driving. It seems like you're blaming management for the fact that the stock market mispriced the long-term value of crypto mining.
    - twblalock 8y ago
      It's not like Nvidia was trying to hold down expectations and the market went crazy anyway. Nvidia based their own revenue guidance on the same assumptions about crypto mining that market analysts made. They missed their guidance in November because of that.
    - Nelson69 8y ago
      Not just is it intact, but is there really an alternative ML/AI platform out there? They're still the best (only?) game in town with the full stack. And you can go buy or lease access to their parts right now and get radical performance improvements for your model training.
      - LAMY2000_EF 8y ago
        kseems like a lot of startups are trying to build things equivalent to TPUs. Also one can use FPGAs for inference(?) maybe also training? I think a lot of people see an opportunity to try to take a slice of the big compute market for ML/AI. who knows if these alternatives really are viable.... but google has a lot of smart people and building your own silicon seems like a great idea these days..so I think other people will attack their stack.
        sitkack 8y ago
        AI is a pretty tractable workload for GPUs/TPUs/FPGAs. Inference is moving to many more places, the days of Nvidia being the solution for AI are over. It will still be the goto for research, but as things mature, the nets will literally run anywhere there is a MAC (multiply accumulate).
        pmoriarty 8y ago
        It may run, but will it run as cost-effectively for the same amount of performance as it would on a GPU?
        Setepenre 8y ago
        yeah, you have GPU like chips being developed by a lot of companies invested in AI. From server chips for training, down to cell phone chips for cheap inference. I am really hoping to see AMD entering the battlefield. AMD GPUs are more than capable of handling the workload it is just a software problem.
  - vkou 8y ago
    They did have a plan in place. They didn't overbuild fabs during the gold rush, because they expected it not to last. This is one of the reasons for the GPU price hikes, and supply shortages over the past few years. As it turned out, this was the correct call.
    - mechagodzilla 8y ago
      Nvidia is a fabless company - they have tsmc make their chips.
  - zanny 8y ago
    I never make memes, but this stupid overused meme is so dang appropriate: https://i.imgflip.com/2ottk6.jpg https://i.imgflip.com/2ottk6.jpg
    - i386 8y ago
      HN is not Reddit.
      - KirinDave 8y ago
        Indeed, Reddits communication culture is way more advanced.
      - LAMY2000_EF 8y ago
        I mean this meme is actually a kinda useful comment poking fun at excessively short-term thinking among investors.
      - deleted 8y ago
        [deleted]
      - seattle_spring 8y ago
        Yes, we are reminded of that everytime someone with a slight sense of humor is squashed by a comment like yours.
        i386 8y ago
        You are free to choose the many other communities on the internet if you don't like this one.
        seattle_spring 8y ago
        I'm quite fine here, thanks! And you are free to scroll on to other comments if you don't like the ones you are reading.
        sethrin 8y ago
  - elipsey 8y ago
    I think they are doing a pretty amazing job of controlling prices and inventory considering the recent craziness of the GPU market. They apparently sold all they could make at very high prices until a few months ago, and since then they seem to be trickling out their supply before releasing new mid range cards. I believe they have contractual agreements with card makers mandating price floors, and this seems to be working; two year old mid range GPUs are still selling at or above launch MSRP.[1] The only cheaper deal is used (probably mining) hardware on ebay, still closing for %60-%75 of new launch price.[2] If there is really a glut, it sure isn’t reflected in consumer prices. Maybe the new big GPUs can use whatever production capacity isn’t needed yet for mid range products, and make up for lower volume with higher margins. It seems like AMD can’t really compete on efficiency right now – just price and raw performance up to whatever power limit consumers will tolerate (e.g. RTX2070 mostly outperforms Vega 64 with almost half TDP) so they can’t really compete on the high end. As far as I can work out Nvidia earnings aren't falling on low volume (yet); Q3 2018 earnings were up %2.[3] [1] https://en.wikipedia.org/wiki/List_of_Nvidia_graphics_processing_units#GeForce_10_series https://en.wikipedia.org/wiki/List_of_Nvidia_graphics_proces... [2] https://www.ebay.com/sch/i.html?_from=R40&_nkw=gtx+1060&_sacat=0&LH_ItemCondition=3000&rt=nc&LH_Sold=1&LH_Complete=1 https://www.ebay.com/sch/i.html?_from=R40&_nkw=gtx+1060&_sac... [3] https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-third-quarter-fiscal-2019 https://nvidianews.nvidia.com/news/nvidia-announces-financia...
    - ksec 8y ago
      >They apparently sold all they could make at very high prices until a few months ago If that was the case they wouldn't have 90 days ( 3 months ) of inventory sitting in channels with high volume orders signed with TSMC until December. One of the reason I believe TSMC lowed their 2019 forecast was because AMD and Nvidia have too much inventory.
paulddraper 8y ago
Yep, not a failure for Nividia per say: solid fundamentals, 20 P/E, 500% of their valuation three years ago. Top tier performance. It's only "failure" for the investors who prodded the inflated valuation along for the past 12-18 months.
- ksec 8y ago
  And they still have room to grow. I don't understand why it was hammered so badly.
  - bionsystem 8y ago
    It was not hammered, it went way too high in the first place. Imagine someone wants to buy your house for twice the price because they expect the rent to double up. You'd happily sell it wouldn't you ? Then they realize the price isn't doubling up anytime soon ; they would either have to hold it for a very long time or sell it again for the original price. Yet nothing changed about your house, it's still brick and mortar. That's what happens with those stocks. Companies like NVidia expect it to happen from time to time so the price itself doesn't mean much (if anything they will buy their own stock when at a low price and sell it at a high price). It doesn't change the value of the company (which may or may not be priced correctly by the market at any given time).
nonbel 8y ago
>"what was Nvidia supposed to do?" The same thing AMD did?
- hoffs 8y ago
  And what did AMD do? Not have a good GPU to compete?
  - nonbel 8y ago
    > "For Q2, we were approximately 6% of revenue for blockchain. For Q3, we’re planning very little blockchain." https://markets.businessinsider.com/news/stocks/amd-stock-price-crypto-bitcoin-boom-over-earnings-call-2018-7-1027404897 https://markets.businessinsider.com/news/stocks/amd-stock-pr... > "So our forward looking estimates when we set out our financial analyst model, it didn’t have crypto in it. It had growth through high performance CPUs, high performance GPUs, some of our base business. If we overlay some crypto on top of that, that’s great. And if crypto goes down in 2018, that’s totally okay, we have plenty of other growth drivers in the business." http://cryptoblockchainresearch.com/2018/01/01/amd-crypto-exposure-is-low-but-high-potential/ http://cryptoblockchainresearch.com/2018/01/01/amd-crypto-ex...

ianlevesque 8y ago

They did openly tell investors the cryptocurrency decline was coming too.

r00fus 8y ago
They should’ve had a plan in place to transition maybe?
- danhak 8y ago
  What sort of transition, exactly? Their core business is intact and they're strongly positioned in AI and autonomous driving. It seems like you're blaming management for the fact that the stock market mispriced the long-term value of crypto mining.
  - twblalock 8y ago
    It's not like Nvidia was trying to hold down expectations and the market went crazy anyway. Nvidia based their own revenue guidance on the same assumptions about crypto mining that market analysts made. They missed their guidance in November because of that.
  - Nelson69 8y ago
    Not just is it intact, but is there really an alternative ML/AI platform out there? They're still the best (only?) game in town with the full stack. And you can go buy or lease access to their parts right now and get radical performance improvements for your model training.
    - LAMY2000_EF 8y ago
      kseems like a lot of startups are trying to build things equivalent to TPUs. Also one can use FPGAs for inference(?) maybe also training? I think a lot of people see an opportunity to try to take a slice of the big compute market for ML/AI. who knows if these alternatives really are viable.... but google has a lot of smart people and building your own silicon seems like a great idea these days..so I think other people will attack their stack.
      - sitkack 8y ago
        AI is a pretty tractable workload for GPUs/TPUs/FPGAs. Inference is moving to many more places, the days of Nvidia being the solution for AI are over. It will still be the goto for research, but as things mature, the nets will literally run anywhere there is a MAC (multiply accumulate).
        pmoriarty 8y ago
        It may run, but will it run as cost-effectively for the same amount of performance as it would on a GPU?
        Setepenre 8y ago
        yeah, you have GPU like chips being developed by a lot of companies invested in AI. From server chips for training, down to cell phone chips for cheap inference. I am really hoping to see AMD entering the battlefield. AMD GPUs are more than capable of handling the workload it is just a software problem.
- vkou 8y ago
  They did have a plan in place. They didn't overbuild fabs during the gold rush, because they expected it not to last. This is one of the reasons for the GPU price hikes, and supply shortages over the past few years. As it turned out, this was the correct call.
  - mechagodzilla 8y ago
    Nvidia is a fabless company - they have tsmc make their chips.
- zanny 8y ago
  I never make memes, but this stupid overused meme is so dang appropriate: https://i.imgflip.com/2ottk6.jpg https://i.imgflip.com/2ottk6.jpg
  - i386 8y ago
    HN is not Reddit.
    - KirinDave 8y ago
      Indeed, Reddits communication culture is way more advanced.
    - LAMY2000_EF 8y ago
      I mean this meme is actually a kinda useful comment poking fun at excessively short-term thinking among investors.
    - deleted 8y ago
      [deleted]
    - seattle_spring 8y ago
      Yes, we are reminded of that everytime someone with a slight sense of humor is squashed by a comment like yours.
      - i386 8y ago
        You are free to choose the many other communities on the internet if you don't like this one.
        seattle_spring 8y ago
        I'm quite fine here, thanks! And you are free to scroll on to other comments if you don't like the ones you are reading.
        sethrin 8y ago
- elipsey 8y ago
  I think they are doing a pretty amazing job of controlling prices and inventory considering the recent craziness of the GPU market. They apparently sold all they could make at very high prices until a few months ago, and since then they seem to be trickling out their supply before releasing new mid range cards. I believe they have contractual agreements with card makers mandating price floors, and this seems to be working; two year old mid range GPUs are still selling at or above launch MSRP.[1] The only cheaper deal is used (probably mining) hardware on ebay, still closing for %60-%75 of new launch price.[2] If there is really a glut, it sure isn’t reflected in consumer prices. Maybe the new big GPUs can use whatever production capacity isn’t needed yet for mid range products, and make up for lower volume with higher margins. It seems like AMD can’t really compete on efficiency right now – just price and raw performance up to whatever power limit consumers will tolerate (e.g. RTX2070 mostly outperforms Vega 64 with almost half TDP) so they can’t really compete on the high end. As far as I can work out Nvidia earnings aren't falling on low volume (yet); Q3 2018 earnings were up %2.[3] [1] https://en.wikipedia.org/wiki/List_of_Nvidia_graphics_processing_units#GeForce_10_series https://en.wikipedia.org/wiki/List_of_Nvidia_graphics_proces... [2] https://www.ebay.com/sch/i.html?_from=R40&_nkw=gtx+1060&_sacat=0&LH_ItemCondition=3000&rt=nc&LH_Sold=1&LH_Complete=1 https://www.ebay.com/sch/i.html?_from=R40&_nkw=gtx+1060&_sac... [3] https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-third-quarter-fiscal-2019 https://nvidianews.nvidia.com/news/nvidia-announces-financia...
  - ksec 8y ago
    >They apparently sold all they could make at very high prices until a few months ago If that was the case they wouldn't have 90 days ( 3 months ) of inventory sitting in channels with high volume orders signed with TSMC until December. One of the reason I believe TSMC lowed their 2019 forecast was because AMD and Nvidia have too much inventory.

paulddraper 8y ago

Yep, not a failure for Nividia per say: solid fundamentals, 20 P/E, 500% of their valuation three years ago. Top tier performance. It's only "failure" for the investors who prodded the inflated valuation along for the past 12-18 months.

ksec 8y ago
And they still have room to grow. I don't understand why it was hammered so badly.
- bionsystem 8y ago
  It was not hammered, it went way too high in the first place. Imagine someone wants to buy your house for twice the price because they expect the rent to double up. You'd happily sell it wouldn't you ? Then they realize the price isn't doubling up anytime soon ; they would either have to hold it for a very long time or sell it again for the original price. Yet nothing changed about your house, it's still brick and mortar. That's what happens with those stocks. Companies like NVidia expect it to happen from time to time so the price itself doesn't mean much (if anything they will buy their own stock when at a low price and sell it at a high price). It doesn't change the value of the company (which may or may not be priced correctly by the market at any given time).

nonbel 8y ago

>"what was Nvidia supposed to do?" The same thing AMD did?

hoffs 8y ago
And what did AMD do? Not have a good GPU to compete?
- nonbel 8y ago
  > "For Q2, we were approximately 6% of revenue for blockchain. For Q3, we’re planning very little blockchain." https://markets.businessinsider.com/news/stocks/amd-stock-price-crypto-bitcoin-boom-over-earnings-call-2018-7-1027404897 https://markets.businessinsider.com/news/stocks/amd-stock-pr... > "So our forward looking estimates when we set out our financial analyst model, it didn’t have crypto in it. It had growth through high performance CPUs, high performance GPUs, some of our base business. If we overlay some crypto on top of that, that’s great. And if crypto goes down in 2018, that’s totally okay, we have plenty of other growth drivers in the business." http://cryptoblockchainresearch.com/2018/01/01/amd-crypto-exposure-is-low-but-high-potential/ http://cryptoblockchainresearch.com/2018/01/01/amd-crypto-ex...