NVIDIA Corporation (NVDA), Advanced Micro Devices, Inc. (AMD): Is This Technology Company on the Path to Recovery?

QUALCOMM, Inc. (NASDAQ:QCOM) is an undisputed leader in the LTE chip segment, with 86% market share in 2012. The company recently announced the launch of a new global LTE chip, which will make it easier for the smartphones to make transition over different 4G protocols.

With Tegra 4i, NVIDIA Corporation (NASDAQ:NVDA) is finally in the position to challenge the stronghold of Qualcomm, despite the fact that it will receive stern competition not only from Qualcomm, but also from Intel Corporation (NASDAQ:INTC), which is planning for a whole new range of Atom based processors to capture mobile computing segment.

Tegra 4i comes with various new features including integrated modem. Apparently, the chip may be embedded in cameras to enhance their performance. In this way, the chip is more versatile than its Qualcomm counterpart Snapdragon. However, Qualcomm is on the verge of releasing new Snapdragon 800 series, which is expected to provide tough competition to Tegra 4i.

Conclusion

NVIDIA Corporation (NASDAQ:NVDA) now clearly divides its business in Tegra and GPU segments. The new classification will help it in focusing its resources and plan in a better way. With just a 4.71% gain so far in the year, the stock is still underperforming broader markets. Despite strong results and a healthy product pipeline, the market seems to have unwarranted pessimism towards the stock.

The company has paid dividends to return value to investors. It also has a share buyback program in place, though, it has not made any such repurchase since 2008. Its stock trades at a P/E ratio of 14, lower than industry standard, and shows that the stock has good upside to it. Its new soon to be released product may just turn out to be the right kind of catalyst to propel its share price upward.

The article Is This Technology Company on the Path to Recovery? originally appeared on Fool.com and is written by Sujata Dutta.

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