Can Nvidia’s New High-End Chips Boost Its Stock?

Nvidia's new chips sound powerful, but will they give the stock lift assuming they are confirmed?

During the E3 gaming conference, Advanced Micro Devices (NASDAQ:AMD) announced a new set of graphics cards. The company was able to show off its new GPUs that would compete with Nvidia (NASDAQ:NVDA) for market share in the upper-mid-range and high-end gaming chip market.

Can Nvidia’s New High-End Chips Boost Its Stock?
Source: Shutterstock

But there’s a reason NVDA is considered the best of the best in the GPU world. The chipmaker doesn’t plan to sit by idly while AMD eats its lunch. Instead, the company’s out to fight, and it’s bringing out the “Super” guns.

New Nvidia GPUs

According to reports, Nvidia could unveil its new Super lineup on June 21, although that date is not necessarily set in stone. No matter when the unveil date is though, the main point stays the same: Nvidia’s new GPUs will be robust.

Keep in mind, this is just a news leak, so until Nvidia confirms the details in their announcement, they are just reports. But, so far, it looks impressive. NVDA will reportedly launch five Super graphics cards across its RTX lineup. It’s rumored that the 2060, 2070, 2070 Ti, 2080 and 2080 Ti will all get the Super bump.

From TechRadar (bold emphasis added):

“The Nvidia GeForce RTX 2080 Ti Super will apparently feature an entirely new graphics processor (GPU), and one that is ‘not a repurposed Quadro part,’ according to WccfTech. This card will also be completely unlocked.

As for the non-flagship members of the RTX lineup, they will all feature better GPUs, and the ‘Super’ variants will be priced the same as their non-Super variants, while the existing models will drop in price. For example, the Nvidia GeForce RTX 2070 Super will feature an ‘unlocked’ but non-OC variant of the RTX 2080 GPU.”

Implications for NVDA, AMD

What does this mean for Nvidia? Each year we get better and better products from Nvidia. Just attend or watch the livestream of the keynote presentation from Nvidia’s GTC conference. Admittedly it’s almost three hours long, but it’s packed full of amazing upgrades, updates and new technologies. This latest step in super-powered GPUs is impressive.

For AMD, the chipmaker continues to battle for position and market share, and its battle with Nvidia is still forging ahead. AMD is still playing a game of catch-up, but that doesn’t imply that AMD is lackluster. In fact, AMD is a great company that makes really good products. There’s a reason its stock has gone from sub-$2 in 2016 to a new 52-week high this week north of $34.

This company is doing a great job and as the war heats up between Nvidia and AMD, it’s going to be a fun game to watch.

At E3, AMD showed off its Radeon RX 5700 XT and RX 5700 GPUs, which are aimed to compete with Nvidia’s GeForce RTX 2070 and 2060, respectively. AMD’s new GPUs are the first ones built on the company’s new Navi architecture.

From a price perspective, the RX 5700 XT and RX 5700 GPUs weigh in at $449 and $379, respectively. That’s compared to Nvidia’s two competing chips listing at $499 and $349. From a power and performance perspective, AMD’s new chips put up a good fight against the competition.

All that said, Nvidia still dominates the high-end space for those willing to fork out the cash. And assuming its reported Super line-up is more than just rumor, it should continue to hold a strong grip over current competition. As the overall pie grows though, there’s still room for AMD to win too.

Trading NVDA Stock

chart of NVDA stock
Click to Enlarge

NVDA stock did a great job surging back from $124 in December to $190+ in April. One could argue that shares rallied too far, too fast. That said, not many were looking for Nvidia stock to retrace nearly all off that move, with the stock bottoming near $132.50 earlier this month.

In all, the stock fell almost 25% in a month, something I said was overkill for such a high-quality company. While NVDA stock has short-term hurdles, it still has great long-term potential.

Will these chips be the next catalyst to help elevate the stock? One can hope. For starters though, NVDA needs to get above its 20-day moving average. Above that though is a cacophony of different support, resistance and trend-line levels between $167 and $193. It will take time to push higher, but it’s possible.

Currently, the trend is down and NVDA will need the market and company-specific news to cooperate in order to get its stock price higher. Maybe a new set of Super chips will be the first step.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long NVDA.

Article printed from InvestorPlace Media,

©2020 InvestorPlace Media, LLC