Back in July 2006, when AMD merged with ATI to get into the graphics chip market, Nvidia (NVDA) rallied from (a split-adjusted) $12 to $15 on speculation that it too would be taken over, most likely by AMD's much larger competitor. I immediately thought, "I've missed the move".
A year and a half later, NVDA sits at $36, still an independent company. By thinking I had missed the move, I ended up missing the real move.
Better late than never, I picked up some shares this week at $35. I believe NVDA is a great way to play the booming PC market; everybody mentions Intel, Microsoft, HP, and Dell, but seems to forget Nvidia - even though they dominate the graphics chip market - and that for today's PC users, graphical power is more important than computational power. These users demand Nvidia's superior products. Longer-term, Nvidia's technology promises to be critical to the gaming console and home theater entertaiment segments (their chip is already in use in the PS3, which, while lacking the software, is undeniably the most advanced gaming system platform out today).
While it is risky to buy a stock that has run like NDVA has, it still has reasonable valuations, a great balance sheet, and is just a $20 billion dollar company...perhaps Intel will buy it yet.
