I really don't understand this.Could anyone tell me fundamentally why this stock keeps going down. I mean , their balance sheet looks good,they don,t have a credit problem, and their PE is around 12. How many tech stocks can boast of this?
you're right in saying that nvda's fundamentals are good. you won't find a company out there that has better fundamentals or better future prospects.
however, fundamentals don't matter right now. not at all. if they did, nvda would be trading around 50 or 60.
given the current markeplace mentality, this thing could drop to 15 based on nothing other than an earnings report from friggin' nabisco. nvda beats its numbers and raises guidance? the market shrugs its shoulders.
it's call irrational behavior.
remember "irrational exuberance"? the current state of things is just the opposite: irrational pessimism.
if you're smart, you're taking advantage of the irrational behavior of others and accumulating.
They also have alot of problems. SEC is on to them. CEO isn't believable and is alienating msft who holds the key to their future, they no longer have a technology advantage over their competitors, pc industry is weak.
msft is a great company. Controls each industry that they are in. NVDA supplies the graphic chipset to xbox by msft. MSFT has determined that in order for them to control the game console market they needed to lower the price 33%. NVDA thought that was 'cool' because msft might sell more units. MSFT says 'play ball', nvda says 'shove it'. They both go to arbitration. Either way it turns out, nvda will lose. If arbitrator sides with nvda, then msft will change suppliers and nvda loses. If arbitrator sides with msft, nvda loses.