ATI has been involved with creating computer graphics boards since their inception. Graphics boards are a vital part of a computer, whether they are integrated into a motherboard or a high-end standalone unit. Over the past year ATI has released video cards that are compatible with the latest Windows graphics operating environment, DirectX 9. ATI's graphics cards truly blow away the competition, in video game applications as well as the professional fields of 3d modeling and animation, engineering and architecture. Their largest competitor, Nvidia (NVDA) formerly had the best product for previous operating environments, looking to Direct X 9 and beyond, Nvidia has very little to offer.
ATI's Direct X 9 product line consists of the Radeon series video cards for consumer use ( http://www.ati.com/products/gamer.html) , and the FireGL line for professionals.
http://www.ati.com/products/workstation.html
Nvidia has the FX line for consumers
http://www.nvidia.com/page/fx_5900.html
and the Quadro FX for professionals
http://www.nvidia.com/page/quadrofx.html
Each company will sing its own praises about how great their proprietary products are, but the figures that matter are Benchmarks.
The benchmarks are quantitative analysis tests of actual performance of computer products.
Nvidia offers a "better" stand-alone graphics board for professional use: The Quadro FX3000. This card is more then twice the cost of ATi's card, however; and only has about a 10% increase in performance. This 10% increase is not worth the money for professionals though.
The way that professional graphics renderings work is that a network of dozens of computers are hooked up to render a scene. For a company doing this type of operation, they would be able to get a faster and better results with the same amount of money if they choose ATI's line, because they would be able to afford many more.
See the 3 charts on this page for a graphic understanding: http://www20.tomshardware.com/graphic/20030916/opengl-20.html
The first Direct X 9 application is an upcoming video game, Half Life 2. This is going to be the largest video game release of the year. ATI has signed an exclusive deal with the designers of Half Life to be able to package their video cards with Half Life 2.
The reason for this being is that ATI has a much better product as evidenced here: http://www.techreport.com/etc/2003q3/valve/index.x?pg=1
In this presentation, the leader of Valve, the creator of Half Life talks about how ATI has the far superior product, producing twice the performance with very little optimization work. Valve worked on optimizing Nvidia's card to work with Direct X 9 and Half Life for four times as long as with ATI. Still, ATI's still nearly doubled the performance of Nvidia when using the older operating environment, Direct X 8. The decision has been made by Valve that Nvidia's product is so bad they cannot even run it as a Direct X 9 product. Note that Valve has a vested interest in getting performance out of both cards because they want to sell games to owners of both brands of video cards.
Expect ATI to take total control over the consumer graphics board market over the next 12-18 months, as Nvidia looks to branch into other markets, such as the the media center PC market. This is in an effort to compensate for their loss of market share in their primary line of business.
I recommend ATI and put out a target price of $30.00 in the next six months, and $65.00 in the next 18 months. I consider ATI a strong buy as it will outperform the Nasdaq and the technology sector easily. Nvidia will underperform and continue to lose their market share. Sell Nvidia.
From ATI's unexpected dominance in graphics cards in the past months, and Nvidias lackluster products, ATI will beat analysts expectations. I feel that their actual earnings will be 13 cents a share, when they are reported on Friday, October 3rd, 2003 at 8:00am. Also expect for ATI to project an excellent earnings forecast for next quarter.
Finally, here are Yahoo Finances pages on both nvidia and ati, the articles about ATI adding new partners for production of graphics board, who were previously with nvidia is interesting, also check out the analyst information.
http://finance.yahoo.com/q?s=atyt
http://finance.yahoo.com/q?s=nvda
Rich Pullman Independent Financial Analyst
ATI's Direct X 9 product line consists of the Radeon series video cards for consumer use ( http://www.ati.com/products/gamer.html) , and the FireGL line for professionals.
http://www.ati.com/products/workstation.html
Nvidia has the FX line for consumers
http://www.nvidia.com/page/fx_5900.html
and the Quadro FX for professionals
http://www.nvidia.com/page/quadrofx.html
Each company will sing its own praises about how great their proprietary products are, but the figures that matter are Benchmarks.
The benchmarks are quantitative analysis tests of actual performance of computer products.
Nvidia offers a "better" stand-alone graphics board for professional use: The Quadro FX3000. This card is more then twice the cost of ATi's card, however; and only has about a 10% increase in performance. This 10% increase is not worth the money for professionals though.
The way that professional graphics renderings work is that a network of dozens of computers are hooked up to render a scene. For a company doing this type of operation, they would be able to get a faster and better results with the same amount of money if they choose ATI's line, because they would be able to afford many more.
See the 3 charts on this page for a graphic understanding: http://www20.tomshardware.com/graphic/20030916/opengl-20.html
The first Direct X 9 application is an upcoming video game, Half Life 2. This is going to be the largest video game release of the year. ATI has signed an exclusive deal with the designers of Half Life to be able to package their video cards with Half Life 2.
The reason for this being is that ATI has a much better product as evidenced here: http://www.techreport.com/etc/2003q3/valve/index.x?pg=1
In this presentation, the leader of Valve, the creator of Half Life talks about how ATI has the far superior product, producing twice the performance with very little optimization work. Valve worked on optimizing Nvidia's card to work with Direct X 9 and Half Life for four times as long as with ATI. Still, ATI's still nearly doubled the performance of Nvidia when using the older operating environment, Direct X 8. The decision has been made by Valve that Nvidia's product is so bad they cannot even run it as a Direct X 9 product. Note that Valve has a vested interest in getting performance out of both cards because they want to sell games to owners of both brands of video cards.
Expect ATI to take total control over the consumer graphics board market over the next 12-18 months, as Nvidia looks to branch into other markets, such as the the media center PC market. This is in an effort to compensate for their loss of market share in their primary line of business.
I recommend ATI and put out a target price of $30.00 in the next six months, and $65.00 in the next 18 months. I consider ATI a strong buy as it will outperform the Nasdaq and the technology sector easily. Nvidia will underperform and continue to lose their market share. Sell Nvidia.
From ATI's unexpected dominance in graphics cards in the past months, and Nvidias lackluster products, ATI will beat analysts expectations. I feel that their actual earnings will be 13 cents a share, when they are reported on Friday, October 3rd, 2003 at 8:00am. Also expect for ATI to project an excellent earnings forecast for next quarter.
Finally, here are Yahoo Finances pages on both nvidia and ati, the articles about ATI adding new partners for production of graphics board, who were previously with nvidia is interesting, also check out the analyst information.
http://finance.yahoo.com/q?s=atyt
http://finance.yahoo.com/q?s=nvda
Rich Pullman Independent Financial Analyst
