Tech Stock Thoughts #4: CES, Intel, Qualcomm, IAC, Virtual Stores
Notable CES Product Announcements: CPUs, GPUs, Notebooks, Rollable Phones, Wi-Fi 6E Gear
A quick recap of CES hardware and chip announcements that caught my eye:
Intel vs. AMD vs. Nvidia:
- Intel unveiled its Tiger Lake-H notebook processors for gamers and content creators (a bunch of 4-core CPUs with 35W TDPs, plus an 8-core CPU with a 45W TDP). It also shared a few more details about Rocket Lake (its last 14nm Core desktop CPU line, due later in Q1) and Alder Lake (a 10nm notebook/desktop CPU line due in 2H21 that — like many ARM SoCs — will feature a mixture of high-performance and low-power cores), and revealed new security features for its vPro management/security platform for business PCs.
- AMD unveiled its Ryzen 5000 Mobile notebook processor line, previewed its Milan Epyc server CPUs and promised to launch RDNA 2 notebook GPUs and mid-range RDNA 2 desktop GPUs in 1H21.
- Nvidia unveiled its $329 RTX 3060 GPU (arrives in late February), RTX 3060/3070/3080 notebook GPUs (launching on 1/26) and some new features for improving system acoustics, shifting power between a PC’s CPU, GPU and GPU memory (an alternative to AMD’s SmartShift) and letting a CPU access all of a GPU’s memory (an alternative to AMD’s Smart Access Memory).
I shared some thoughts on RealMoney about how Intel and AMD’s PC CPUs measure up in the near-term. In a nutshell: Intel’s single-thread performance (important for gaming and some enterprise workloads) still looks pretty competitive and its new security features could appeal to enterprises, but AMD has a clear multi-thread performance edge (important for content-creation and HPC workloads) and can often strike a balance between single-thread performance, multi-thread performance and power draw in a way that Intel struggles to right now due to its manufacturing issues.
On the GPU side of things, ray-tracing performance and DLSS are still major selling points for Nvidia, even though RDNA 2 has made AMD more competitive on the high end than it has been in a while. Also, Nvidia, which is relying on Samsung for Ampere gaming GPU production, will be launching Ampere notebook GPUs this month and the RTX 3060 next month, while AMD (perhaps due to TSMC’s wafer supply constraints) only promises notebook and mid-range desktop RDNA 2 parts will arrive sometime in 1H21.
Ambarella: A vision processor (good for cars, security cameras, drones, etc.) that can record an 8K stream or four 4K streams. It’s made using a Samsung 5nm process and consumes less than 2W of power. Competes against silicon from Nvidia, Qualcomm and Intel, among others. In some ways, Ambarella is the chip industry equivalent of a Roku, Etsy or Elastic (i.e., a smaller, focused firm that manages to hold its own against much larger firms).
HP/Asus: HP unveiled a new Elite Folio notebook/2-in-1 that’s powered by Qualcomm’s Snapdragon 8cx SoC and has a screen that can both be pulled forward and folded over the notebook’s keyboard, while Asus revealed new dual-screen laptops that sport secondary displays that tilt upwards. Look for Microsoft and Windows OEMs to emphasize touchscreen support and screen/form-factor innovation a lot as they deal with competition from Apple silicon-powered MacBooks. See also Microsoft’s Windows 10X dual-screen notebook platform, which is set to launch at some point this year following a delay.
Intel (Mobileye): A Lidar SoC due in 2025 that will leverage Intel’s silicon photonics manufacturing tech, as well as a proprietary, “software-defined” radar system. Notable both due to Mobileye’s status as the world’s top ADAS vision processor supplier — clearly, unlike Tesla, they’re not sold on a purely camera-based approach to autonomous driving — and because Robinhood favorite Luminar Technologies has been bid up to an $11B+ market cap partly due to enthusiasm about its current Lidar partnership with Mobileye. Also worth adding that NXP has a large and fast-growing automotive radar chip business.
LG: A rollable phone (it uses a flexible OLED panel) and a 4K OLED monitor aimed at content creators. Much like the first foldable phones two years ago, the rollable looks like a proof-of-concept at this point, and will probably ship in very limited volumes (and at a steep price) when it launches later this year. But still, LG’s teaser video is intriguing, and if the smartphone industry’s history has shown anything, it’s that consumers like having more pocketable screen space. (Also, China’s TCL showed a teaser video of a rollable that it’s working on).
Samsung — The Exynos 2100, a new flagship mobile SoC that (along with Qualcomm’s Snapdragon 888) will presumably go into some of Samsung’s 2021 Galaxy S and Note models. Like the Snapdragon 888, the 2100 is made using a 5nm Samsung process, packs a 5G modem and has an 8-core CPU that includes one of ARM’s high-end Cortex-X1 cores. Notably, Samsung promises the 2100 will power devices supporting mmWave networks (Qualcomm’s modems have largely had this market to themselves so far).
Wi-Fi 6E Hardware and Silicon: A bunch of OEMs have unveiled routers supporting the Wi-Fi 6E standard, which significantly boosts available spectrum by supporting 1200MHz of airwaves around the 6GHz band. This is a positive for Skyworks and Qorvo’s Wi-Fi RF chip businesses, since it should drive ASP growth and maybe also some upgrade activity. Qorvo unveiled a pair of Wi-Fi 6E RF front-end modules this week, while Skyworks highlighted a Wi-Fi 6E design win with Asus.
Elsewhere in Tech:
Intel is bringing back Pat Gelsinger to be its CEO — Though having been VMware’s CEO since 2012, Gelsinger was once Intel’s CTO and the architect of its 80486 CPU. Whereas Bob Swan has a CFO background, it’s hard to question Gelsinger’s technical bona fides…and they could prove quite valuable to Intel as it deals with its manufacturing issues, brain drain and stiff competition from AMD, Nvidia and a host of ARM CPU developers.
No word yet about what kinds of changes Gelsinger would like to implement. We might learn a little more during Intel’s Jan. 21 Q4 call, during which the company says it’ll provide an update about the “strong progress” it has made for its pushed-out 7nm node and is also expected to share more about its foundry plans.
Given Gelsinger’s background, it’s a safe bet that Intel’s data center efforts will get a lot of attention under his helm. Also — as Intel continues developing GPUs, FPGAs and AI ASICs — it’s worth noting that Intel’s press release about the CEO change twice declares that the company aims to ”transform from a CPU to a multi-architecture XPU company.”
Separately, Intel said it expects its Q4 revenue and EPS to top its guidance. The bar was being set pretty low here — the high end of Intel’s Q4 sales guidance range spelled a 14% annual revenue drop — but then again, Intel’s stock was pricing in such low expectations. Notebook processor sales likely had something to do with the upside.
Qualcomm is buying server CPU developer Nuvia for $1.4B, will use it for everything but servers — Qualcomm says it plans to use Nuvia’s CPU/SoC IP, which includes a custom ARM CPU microarchitecture known as Phoenix, within SoCs for “flagship smartphones, next-generation laptops, and digital cockpits, as well as Advanced Driver Assistance Systems, extended reality and infrastructure networking solutions.” But apparently not ARM server CPUs — a space where Amazon and (reportedly) Microsoft are doing custom designs, Marvell is offering design services for hyperscalers, and private Ampere Computing is still present for now.
Either way, $1.4B isn’t a bad price to pay if the performance-per-watt claims made by Nuvia in this chart claims are anywhere close to accurate:
Among other things, Nuvia should help Qualcomm better differentiate its mobile processors from Samsung and Mediatek’s offerings, keep its CPU performance-per-watt at least within striking distance of Apple’s A-series SoCs and — though ARM software support perhaps matters more here than performance right now — better compete against Intel and AMD in the Windows notebook processor market. Also, as Reuters’ Stephen Nellis observed, Nvidia’s pending deal to buy ARM might have boosted Qualcomm’s interest in shifting from off-the-shelf ARM cores to custom cores.
IAC shares strong December revenue metrics — As Google, Facebook, Snap and a slew of other online ad players get set to report in the coming weeks, the revenue growth rates IAC has shared for its Dotdash and Search units are an encouraging sign for how online ad spend (already pretty healthy in Q3) trended in Q4.
Dotdash, which runs a network of topic-oriented websites, saw annual revenue growth accelerate to 44% in December from 34% in November and 20% in October. The Search unit, which covers the Ask Media Group and IAC’s PC search ad business, saw growth accelerate to 27% from 12% in November and negative 9% in October.
Also: Ahead of its planned spinoff, IAC’s Vimeo video software/services unit saw growth accelerate to 57% from 54% in November and 49% in October.
The PC industry has a banner Q4 — And it would’ve been stronger still if CPU and LCD-related shortages didn’t affect supply. IDC estimates PC shipments rose 26.1% annually in Q4, while Canalys estimates they rose 25.4%. Gartner estimates just 10.7% growth, but this likely has much to do with the fact that (unlike IDC and Canalys) their numbers don’t cover Chromebooks.
While Chromebooks are especially hot right now, notebooks in general are doing well, as are gaming PCs. And between the Q4 shortages and how many workers look set to partially or fully work remotely long-term, sales should be brisk during 1H21 as well.
(Also, all three firms’ numbers suggest Apple gained share during the first quarter in which it sold Macs powered by its own SoCs, with shipment growth estimates ranging from 31.3% to 49.2%. Apple’s actual Mac revenue growth rate will be shared when it reports on Jan. 27.)
Virtual stores: A VR use case for Facebook? — Fast Company recently did a piece about 3D virtual stores that let consumers click, pan and zoom their way through digital twins of bricks-and-mortar stores (and of course, get details about and buy items placed on virtual shelves). Some of them also have features such as embedded videos and the ability to chat with in-store consultants.
Long-term, this feels like the kind of thing that’s a solid use case for VR in general and Facebook’s VR platforms in particular. Between Oculus, its Shops platform, its payments and messaging services, and its relationships with retailers and consumer brands, Facebook seems uniquely well-positioned to make something like this work on a large scale.
Retailers, meanwhile, could see virtual stores as a way to drive more product discovery and impulse buys than what typically occurs when using a conventional e-commerce website or app.
Stocks gone wild — A few recent tales of market madness:
- Elon Musk’s promotion of the Signal messaging app led shares of Signal Sciences (an OTC-traded firm that has absolutely nothing to do with the app) to rise more than 1,000% before coming back to Earth faster than a SpaceX rocket.
- Zomedica, an OTC-traded veterinary health products firm, saw its penny stock more than triple after Carole Baskin (of Tiger King fame) gave the company a shout-out in a Cameo video.
- GameStop rose as much as 93.7% on Wednesday (it closed up a mere 57.4%) thanks to an epic short-squeeze.
- Virgin Galactic and a pair of space-related SPACs (Stable Road Acquisition/Momentus and New Providence Acquisition/AST) saw double-digit gains in after-hours trading on Wednesday after ARK Invest announced plans to start a space ETF.
Each new trading day tends to bring with it one or two fresh stories like this. I won’t try to predict exactly when this mania ends — maybe $2,000 stimulus checks will help things get even crazier before the end arrives — but the mood within segments of tech has gotten very early 2000-like.
