Loup Ventures

About the Author Loup Ventures

At Loup Ventures, research is in our blood. The spirit of our team has always lived on the curiosity to discover new insights that yield investment opportunities. For years we did this on Wall Street, focused on public tech companies. Now we invest in private frontier tech companies, but public companies like Tesla, Nvidia, and others are also meaningful innovators in frontier tech. These public companies are shaping the emergence of AI, robotics, autonomous vehicles, and AR/VR just as much as early stage startups. As a result, we’ve always kept a watchful eye on public market participants to inform our private investment strategy. Gene Munster is a managing partner and co-founder at Loup Ventures. Prior to Loup Ventures, Gene was a managing director and senior research analyst at Piper Jaffray where he covered technology companies including Apple, Amazon, Google and Facebook. During his 21-year tenure, Gene received many acknowledgements including: Top Stock Picker from Forbes, Best on the Street from The Wall Street Journal, and was widely recognized for his work on Apple. Gene holds a bachelor’s degree in finance and entrepreneurship from University of St. Thomas.

3 Key Takeaways from Nvidia’s (NVDA) CES Keynote


By Gene Munster

At Nvidia’s (NVDA) CES keynote the company announced a new graphics card, the RTX 2060, and 40+ RTX laptop models from all major OEMs. The three key takeaways are:

  • The company has shifted its CES focus back to gaming, with the new RTX 2060 gaming graphics card that targets 1/3 of the company’s current gaming install base. At last years’ CES, the majority of announcements were related to autonomous vehicles, along with a gaming display that has yet to ship.
  • Nvidia’s focus on gaming at CES complicates the company’s efforts to clean up gaming channel inventory related to the crypto-mining hangover. We continue to expect it will take until the end of the May quarter to clean up gaming channel inventory.
  • The new RTX 2060 gaming graphics card is priced at $349. This is significantly cheaper than the RTX 2070 at $599, which was released in September along with the RTX 2080 ($799) and RTX 2080 Ti ($1,199). The is important because the company is announcing more affordably priced graphics cards. This is more of a negative for AMD than a positive for Nvidia. Historically, Nvidia has done really well for the high-end graphics cards and has faced more competition for mass-market cards.

CEO Jensen Huang shared that the next generation of computer graphics needs to improve three essential components for more realistic graphics: reflections, shadows, and refraction. The next-gen Nvidia RTX platform combines ray tracing and AI to do so. Despite Nvidia being well-positioned to lead the next-generation of computer graphics, there are two short-term hurdles that the company needs to overcome: 1) As outlined above, Nvidia needs to clean up its gaming channel inventory. 2) More developers need to utilize ray tracing technology. EA’s Battlefield V and upcoming Anthem were highlighted in the keynote as two examples, but in all, there are fewer than 15 games which will support ray tracing in the near future. In order for gamers to have an incentive to upgrade, more developers need to integrate ray tracing into their titles.

Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio.

Nvidia now looks like a very compelling investing opportunity, as TipRanks analytics showcasing the stock as a Buy. With an average price target of $228.81, analysts are predicting massive upside potential of nearly 70%. In total, NVDA stock has received 22 ‘buy’ ratings vs. 8 ‘hold’ rating in the last three months. (See NVDA’s price targets and analyst ratings on TipRanks)

 

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