Moore's Demise

Moore's Demise Nvidia hasn't gotten a lot of love from investors, or gamers, this year. The chipmaker's stock is down 56% in 2022, and videogame buffs have complained about the sky-high prices of Nvidia's graphics cards. For investors, Nvidia is a richly valued stock facing a potential cyclical downturn in its business and with geopolitical risks only rising. For gamers, the chip shortage and stay-at-home shift has boosted demand for top-of-the-line graphics chips well above supply, allowing Nvidia to charge what it wants. The company has a new message for gamers: Don’t blame us, wrote Barron's Tae Kim today. In a media call Wednesday, Nvidia CEO Jensen Huang said that chip-making costs are up too. “A 12-inch wafer is a lot more expensive today,” he said. “Moore’s Law is dead … It’s completely over.”  That refers to Intel co-founder Gordon E. Moore's famous prediction that “the number of transistors incorporated in a chip will approximately double every 24 months.” That has held true for decades, and has been behind chipmakers' ability to dramatically increase computing performance over time despite a similar cost. The gaming community isn't buying it. Tae wrote: Over the past day, many gamers on social media and message boards expressed outrage with the pricing of Nvidia’s next generation gaming graphics chips, code-named “Ada Lovelace,” which were revealed on Tuesday at its GTC conference. At the conference, the company announced the coming RTX 4090 card and two versions of the RTX 4080 card, all of which will use the Ada chip architecture. The 4090 will sell for $1,599 and will be available on Oct. 12, while the 4080 cards will cost $899 and $1,199, respectively, and go for sale in November. For reference, the prior generation RTX 3080 was priced at $699 when it was released two years ago. Huang said gamers need to compare performance on a price point-to-price point basis, adding the new Ada Lovelace cards are “monumentally better” versus the prior products at equivalent price points. Investors seemed to like the show of pricing power, however. Nvidia stock added 0.7% today despite the nasty day for the broader market. Read more of Tae's Nvidia coverage here.