Share Repurchase Activity Is the X-Factor for NVIDIA Corporation (NVDA) This Quarter

In the discrete GPU business, NVIDIA has been taking share from struggling competitor Advanced Micro Devices, Inc. (NYSE:AMD) for the past several quarters, since NVIDIA’s new Kepler generation chips came to market. AMD has cut its workforce dramatically in recent months to save money, and this could give cash-rich NVIDIA a permanent research and development advantage. However, some observers think that the discrete GPU market will be more or less eliminated by upcoming generations of chips from Intel and AMD that include better integrated graphics solutions.  NVIDIA’s Q4 earnings report will provide little or no insight into these important trends.

As always, people will first look at revenue and earnings when NVIDIA reports its quarterly results this week. However, with the company’s future earnings dependent on industry trends and products that have not been released yet, the status of NVIDIA’s share repurchase program may be just as significant. NVIDIA has a substantial amount of excess cash on its balance sheet, and it would be a positive for shareholders if the company used it to offset the dilutive effects of employee stock option exercises.

The article Share Repurchase Activity Is the X-Factor for NVIDIA This Quarter originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of NVIDIA. The Motley Fool recommends Intel and NVIDIA. The Motley Fool owns shares of Intel and Qualcomm.

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