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Bulls and Bears on Nvidia as the Chipmaker Moves into Robotics

Last Updated September 30, 2020 11:42 AM
Melanie Kramer
Last Updated September 30, 2020 11:42 AM
  • After shelving a focus on processor chips for the cryptocurrency mining market, Nvidia is looking to robotics and artificial intelligence for future success.

Nvidia’s Seattle Robotics Research Lab

Nvidia has officially opened a 13,000 ft. robotics research lab in Seattle. The lab will have 20 Nvidia roboticists  as well as 30 academic experts.

The lab is working on a dozen robotics projects including “cobots ” that will work alongside humans.

Dieter Fox. Source Wikimedia .

Heading up robotics for Nvidia is Dieter Fox, a researcher, and professor in robotics. He says :

“We want to develop robots that can naturally perform tasks alongside people.”

The lab has a specially designed IKEA kitchen to test its “kitchen manipulator” robot that utilizes AI and deep learning to perform tasks.

“By pulling together recent advances in perception, control, learning, and simulation, we can help the research community solve some of the greatest challenges in robotics.”

And of course, sooner or later this will translate into Nvidia products. Robotics and AI is a longer game than Nvidia’s last jump into cryptocurrency. This foray was achieved by focusing its existing chip-making capabilities to mining. Nvidia stepped back out of its cryptocurrency focus in 2018

Nvidia has an AI research lab in Toronto, Canada as well as 200 scientists under its NVIDIA Research umbrella. These experts are also working on computer vision, self-driving cars, and graphics.

Chipmaker Nvidia Worst Performer on the S&P 500 Last Year

Nvidia Share Price Over the Last Year. Source: Trading View

Nvidia struggled towards the end of 2018 amidst lower demand for its graphics processor unit (GPU) mining chips. It joined technology stocks and the wider markets in a troublesome end to 2018.

There are reports that SoftBank could sell its stake in Nvidia. By late December Nvidia’s share price was 54%  down, making it the worst performer on the S&P 500. Its data center product sales to cloud providers like Amazon failed to meet expectations. Nvidia’s share price had previously risen over its AI and Crypto hype.

Semiconductor stocks are under pressure with Samsung reporting falling chip sales. Though there has been some rebound from December lows Todd Gordon from Trading Analysis said this week :

“The bounce back in the semis since the lows has been a little bit of an underperformance compared to the Nasdaq.”

Erin Gibbs. Source Twitter.

Gordon is recommending shares in Advanced Micro to investors; however Erin Gibbs of S&P Global Market Intelligence says Nvidia stock may be in for a comeback:

“I actually like Nvidia, and one of the reasons is because it’s so beaten up it really looks unlikely for [Nvidia] to get much cheaper at this point. We’re looking at about 50 percent profit growth for 2019.”

Though Gibbs also warns that the semiconductor space as a whole has flipped from a 5% rise in expected profits six months ago to an expected fall of 7%. She added:

“Overall, the semiconductor industry is the one industry that we do not recommend to buy.”

It’s a “Buy” for Nvidia Shares

William Stein, an analyst at Sunset Robinson Humphrey, is bullish  on both the semiconductor industry and Nvidia believing the outcome of trade talks between the U.S and China will make a difference. Stein says:

“We believe a constructive resolution will lift semis, but a delay or destructive resolution will take most lower.”

Stein believes Nvidia stands out as a growth opportunity in the semiconductor space. And, that the release of the Nvidia’s GeForce RTX 2060 gaming graphics card will boost the company’s earnings.

Overall, according to CNN , analyst’s consensus on Nvidia stock is to buy. With 22 out of 37 confident in the stock. Earnings reports from Nvidia are expected on February 13.

Nvidia is not the only technology corporation looking to new markets to boost performance. Amazon is reportedly developing a new game streaming service to compete with Microsoft and Google.

Featured image from Shutterstock.