NVIDIA Corp (NVDA)

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NVDA: Needham Sees Lift from MacBook GPU Slots

By Tiernan Ray

Needham & Co.’s Rajvindra Gill this afternoon reiterates an Overweight rating and a $20 price target on shares of Nvidia (NVDA), following a report this morning by TheVerge’s Nilay Patel saying forthcoming MacBook laptops from Apple (AAPL) will dump Advanced Micro Devices (AMD) graphics processing units (GPU) in favor of Nvidia’s.

Writes Gill, “If these reports are true, then NVDA would supply discrete GPUs into the 15” and 17” Macbook Pro models (see below), which currently use AMD Radeon HD 6750M and 6770M GPUs.”

Gill thinks that could be a measurable contribution to Nvidia’s roughly $4 billion a year in sales:

If we assume a 28% increase in CY13 MacBook Pro sales to 8.6MM units from an estimate of 6.7MM in CY12, and the 15” and 17” models account for 50-60% of Apple’s total yearly MacBook Pro shipments or 4.3MM-5.2MM; then at estimated discrete GPU ASPs of $25-$30 per unit, we could see NVDA generating $27MM-$39MM per quarter or $107-$155MM per year in incremental revenue. Our FY14 (CY13) Non-GAAP EPS would then increase by roughly $0.05-$0.10 to $1.25-$1.30 vs our published estimate of $1.20 based on 40% gross margin.

Nvidia shares are up 10 cents, or 0.8%, at $13.23.
http://blogs.barrons.com/techtraderdaily/2012/05/15/nvda-needham-sees-lift-from-macbook-gpu-slots/?mod=yahoobarrons