Nvidia (NVDA) Falls Off The Map

By Douglas A. McIntyre Published Apr 6, 3:31PM EDT

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Over the last three months, shares of Nvidia (NASDAQ: NVDA) have dropped almost 40%. Chipmakers AMD (NYSE: AMD) and Intel (NASDAQ: INTC) have traded fairly flat over the same period.

AMD has been heavily punished over the last two years, so it makes some sense that its shares are not falling, but Nvidia’s business has a history of has doing well because it operates in the highly profitable graphics chip segment of the market. Slowing PC sales have undermined all of the industry’s suppliers, but the fall in NVDA shares is breathtaking.

According to the AP, over the last quarter Nvidia’s shares were the most volatile in the S&P 500 information technology sector, 70% more volatile than the average stock in the segment.

Nvidia was hit by an old truck know as expenses. While net income was up 57% in its last quarter and sales moved up above expectations, according to MarketWatch expenses rose 16%. The company forecast another jump in costs in the current quarter. No one was surprised when the CFO left the company.

The economy is bad enough now that companies with any increase in costs above expectations are likely to be torn down by Wall St. even those going through incredible growth spurts.

If Nvidia does not show a marked improvement in cost control in the next quarter, it will be a very long one for its shareholders.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.