Word on the “Street” with Nvidia vs ATi

An investment manager and good customer phoned me today while I was struggling at the Montreal airport to find a flight home after missing a connection.

Anyways, we spoke over an afternoon hamburger where he told me that “word on the street” is ATi is taking noticeable market share away from Nvidia on the high end and as a result Nvidia is going to have a tough quarter. It’s an interesting viewpoint, but “the street” credibility hit an all time low after a few analysts downgraded AMD without doing any proper research.

So, here’s the deal, ATi’s X1900 series is fantastic – it’s everything that their R520 should have been and more. Nvidia has enjoyed almost 100% of the high end market for many many months and as a result they have gained big ground in some of the major OEMs as well.

For the first time that I can remember both Nvidia and ATi are doing great in the high end – but for Nvidia, they continue to sell everything that they produce. They have no excess inventory from what I can see, and they are delivering their 512 megabyte 7800 GTX cards as fast as possible. I'm happy to report that we've been able to fill our allocation of 512 cards as required.

The Nvidia 7800 GTX 512 is in high demand, and that hasn’t changed much with the launch of the ATi X1900 series.

Here’s a prediction for you. Nvidia is going to post the most mind blowing quarter in the next two weeks, (yes, mind blowing as in positive). I have no doubt that their product and technology is still in high demand, and it’s obvious that Dell is impressed by them judging by the showcase of Quad SLI at CES.

Quad SLI, for those that don’t know, is a ticket for Nvidia to sell four GPUs per system thereby increasing their overall volume in the high end PC market. Transitioning to 90 nanometer might be a challenge for them however, but some may argue that ATi did much of the legwork to make this happen successfully. ATi missed out on the R520 as a result but they seemed to have refined the process with R580.

The market in general is strong. Nvidia is still holding strong in desktop, and increasing their notebook business in a big way. Nvidia will kick ass this quarter, mark my words – shorters get ready to go broke covering.

ATi will also do well I suspect due to their recent success in the high end, their XBOX 360, and everything else that’s happening over there.

Generally speaking business is good for us, and we’re happy to see demand with both red and green hues – not much blue yet, but that’s another story.