Shortly after Friday's close, it was revealed that NVIDIA (NVDA
264.40, -0.86) will replace Time Warner (TWX) in
the S&P 100 index ahead of the open on Wednesday, June 20. Shares of Time
Warner will be delisted from the exchange due to the company's merger
with AT&T (T 33.01, -0.14), which was completed last week.
NVIDIA’s addition to the S&P 100 solidifies the company's standing as one of the largest and most established names in the S&P 500. Shares of NVIDIA have certainly lived up to the recognition, having climbed 36.4% since the end of 2017 versus a 13.5% gain in the PHLX Semiconductor Index.
The growth in NVIDIA's stock price came as the company delivered two quarterly reports that showed strong earnings and revenue growth.
NVIDIA has been able to get increased mileage out of its most recent product line. The performance leaps achieved in the GeForce GTX1000 processor series, which was launched in mid-2016, allowed the company to lengthen its product cycle. It has now been two years since the launch of the GTX1000 series and reports suggest the GTX1100 series will not be launched until at least late August. It is worth noting that NVIDIA does not launch products until it is ready to satisfy demand, meaning cards launched in late August would be available for sale within days/weeks.
The looming product refresh could prove to be a test of the goodwill the company has built up with users over the last few years. Industry reports have speculated that NVIDIA's new line of video cards will include a proprietary connector for use with VR headsets. At this time, a VR headset needs to be connected to two ports (HDMI and USB 3.0). The situation presents NVIDIA with a choice of using a high-speed HDMI port or developing its own connector in the GTX1100 series. A high-speed HDMI connection would be more universal, and it would be preferred by the industry.
However, given its dedicated user base, NVIDIA could be tempted to include a proprietary connector, which would then tie specific VR headsets to NVIDIA cards. This would mean that users who own an NVIDIA card and an NVIDIA-compatible VR headset would have to replace their headset if they chose to replace their NVIDIA video card with one developed by AMD (AMD 16.20, -0.15). At this time, VR headsets like Oculus Rift and HTC Vive are compatible with both NVIDIA and AMD cards.
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