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The Zacks Analyst Blog Highlights: NVIDIA, Priceline, TripAdvisor, Intel and Advanced Micro Devices

Zacks Equity Research
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For Immediate Release

Chicago, IL – November 20, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include NVIDIA NVDA, Priceline PCLN, TripAdvisor TRIP, Intel INTC and Advanced Micro Devices AMD.

Here are highlights from Friday’s Analyst Blog:

Tech Stock Roundup: NVDA, PCLN, TRIP, INTC

Earnings season is drawing to a close with most of the S&P 500 having reported already, making NVIDIA easily the hottest earnings from last week. The online travel agents continued to disappoint, with both Priceline and TripAdvisor shares plummeting. These and Intel’s deal with Advanced Micro Devices were the top stories from last week-


NVIDIA: NVIDIA reported very strong revenue and earnings growth in its fiscal third quarter, easily beating the Zacks Consensus Estimate on both top and bottom lines. Gaming (driven by strength across geographies and form factors, Nintendo Switch and cryptocurrencies) Data Center (driven by cloud service providers and HPC) and Professional Visualization (driven by VR adoption at defense and automotive customers, stronger demand for high-end real-time rendering, simulation and more powerful mobile workstations) were all up strongly from last year. The guidance indicates that the strength will continue.

Priceline: Priceline reported a strong quarter with both top and bottom lines ahead of the respective Zacks Consensus estimates. The company’s hotel revenues did better than its rental cars and flight bookings, both of which saw weaker volumes. While bookings at the start of the current quarter were at the high end of management expectations, so can’t be considered unusually weak, the guidance was disappointing even by Priceline’s standards (it usually guides conservatively). The reason for the weakness, especially on the hotels side isn’t clear but could be because of efforts by hotels to reach customers directly rather than through a distribution channel.

TripAdvisor: TripAdvisor reported better-than-expected third-quarter earnings on revenues that disappointed. While revenues continued to grow albeit very slowly, earnings dropped over 32% from last year. The hotels side of the business was weak, with other revenues (from attractions, restaurants and vacation rentals) remaining strong. The company burnt cash and saw a reduction in its net cash position.

Intel & AMD Finally Have a Deal

Everyone expected Intel and Advanced Micro Devices to get closer together after Intel’s forced licensing deal with archrival NVIDIA expired in Jan 2017. But one of the things that stood in the way was the fact that AMD also competed with Intel, on multiple fronts.

For AMD, licensing technology to Intel would mean sacrificing profits from chip sales in exchange for royalties from a larger number of chips. It was likely a difficult decision, made easier only by the fact that their combination could help them take share in a market they were both targeting (i.e. high-end gaming laptops), one that is currently dominated by the common enemy NVIDIA.

There are also other areas of interest. The first would be the shrinking PC market and Intel’s need to maintain position while investing in emerging areas like AI, cloud, IoT, auto, etc. The second would be AMD’s unattractive financials that would improve with a steady flow of revenues from Intel.

Third, AMD’s limited presence in the PC gaming segment (the only part of the PC market that still has attractive growth rates) where its discrete GPUs are up against NVIDIA’s, but where Intel has limited presence because it only sells an integrated version. Marrying AMD graphics with Intel processing power would strengthen the integrated solution versus the discrete one.

For those with any doubts about whether the relationship is a short term one or part of a larger-scale alliance between the two, it’s worth noting that AMD VP and chief architect of the Radeon Technologies Group, Raja Koduri is now an Intel employee as its chief architect, SVP of its newly formed Core and Visual Computing Group, and GM of a new initiative to drive edge computing solutions.

The actual product details are limited at this point, but Intel has said that this will be part of its 8th Gen Intel Core family, bringing together its high-performing Intel Core H-series processor, second generation High Bandwidth Memory (HBM2) and a custom discrete graphics chip from AMD’s Radeon Technologies Group – all in a single processor package.

The integration will be facilitated with Intel’s Embedded Multi-Die Interconnect Bridge (EMIB) that will be used for the first time in a consumer device. The purpose of the integration is to fit in more power and performance with better thermal dissipation and consuming less energy into a smaller form factor.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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