Merrill Downgrades Nvidia to 'Sell'

Analyst Joseph Osha thinks Nvidia may begin losing share in its stronghold -- discrete desktop graphics processors

Merrill Lynch downgraded Nvidia (NVDA ) to sell from neutral.

Analyst Joseph Osha says the issues that the graphics processor and software maker has had with its positioning in mobile computing and chipset markets are well understood; he sees no signs that either business is about to reverse for Nvidia. At the same time, he thinks Nvidia may begin losing share in its stronghold -- discrete desktop graphics processors.

Checks in Taiwan suggest ATI Technologies is gaining on Nvidia in the fourth quarter. He says the January, 2004, quarter could be especially hard. Osha notes the stock could decline significantly over the intermediate term. He cut the 11 cents fiscal 2004 (Jan.) earnings per share estimate to 5 cents, and cut the 75 cents fiscal 2005 estimate to 53 cents.

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