Why is ATI (Video Cards) Down?

[shummie]

I bought some ATI (Video Card Mft) stock back in November when it was at 16.10. The stock went up to a bit over 20 before sliding down to it's current price of 17.12.

eTrade Info on ATYT

I'm wondering why this stock has been slipping in January. All of the current press (and past years press) has been good for ATI. It seems like they have become the dominant video card company, and they're moving into new markets with TV settop chips, etc. ATI chips are in more and more laptops, built into more desktop motherboards, in the new Xbox, even in the new MAC Mini. Star report says the stock is undervalued below 19.80.

What gives? Is this just a small affect of the larger market downturn?

In any case, this looks like a good pickup at the current price.

- Jason

[AdamL]

I have no idea, but I can say that the latest Nvidea cards are better than ATI's best offerings, so they're back out of the lead again.

You need a better look at the market though. I find www.overclockers.com to be an excellent source of information.

[laserboy]

Part of it is definitely attributable to the broader market downturn. The majority of a stock's movement is dictated by the market and the sector, which is why it is important to evaluate broader macrotrends as well as company fundamentals in evaluating individual stocks.

Without having taken a closer look at ATI, in general, I think that tech hardware companies make lousy investments. Margins are low, capital expenditures are huge, and stock option abuse is rampant. Invest in a company because you like their business, not just their products.

(Also I prefer Nvidia cards).

[shummie]

I checked out the Star Report for ATI and realized for the first time (probably too late) that ATI is lumped into the Semiconductors category. This makes sense, but may also explain something.

"Semiconductors" have been taking an especially strong hit lately. Some of ATIs beating may be a result of indiscriminate dumping of semiconductors stock/funds.

- Jason