NEW YORK (AP) -- Nvidia got a boost Tuesday after Microsoft Corp. unveiled a tablet computer that will be powered by its computer processors.
THE SPARK: Microsoft's tablet, called Surface, will go head-to-head with Apple Inc.'s iPad, a tall task that no company has accomplished to date. The tablet, which doesn't have a price tag or a release date yet, will attach to a removable rubberized keyboard that also acts like a book cover. It seeks to address one of the main criticisms of the iPad — that it's not as easy to create content than it is to consume it.
A slimmed-down version of the Surface will use a processor from Nvidia, while another version will use Intel Corp.'s.
Processors essentially serve as the brains of computers. The slimmer version will use the Windows RT operating system, which was made for tablets that run on low-power chips.
ANALYSIS: "While we recognize that non-Apple tablets thus far have been a flop, (Windows RT) tablets will include Office and a full keyboard embedded in a thin touch cover," wrote Nomura analyst Romit Shah in a note to investors. "Those are interesting features, in our opinion, that should drive incremental revenue for Nvidia."
The analyst has a "Buy" rating and a $18 target price on Nvidia's stock.
SHARE ACTION: Shares of Nvidia Corp., based in Santa Clara, Calif., rose 84 cents, or 6.8 percent, to $13.24 in early afternoon trading. In the past 52 weeks, the stock has traded in the range of $11.47 and $16.90.