* Nvidia stock soars 15 pct
* Other tech stocks rise ahead of Intel earnings
* Micron shares rise on memory outlook
(Adds industry details, analyst's quotes)
By Noel Randewich
SAN FRANCISCO, Jan 12 Nvidia shares soared 15
percent on Wednesday, their biggest one-day rise in over two
years, as investors bet the company's new chips would win it a
a major stake in future tablets and smartphones.
The rise in Nvidia's stock brought its gain since the
company's debut last week of its new Tegra 2 dual-core mobile
chips to about 50 percent.
Wedbush analyst Patrick Wang said the stock was "trading
purely on momentum at this point."
He said he had been taking calls from clients to help them
estimate how large an impact Nvidia's mobile chips could make
on the market.
Nvidia's new chips, boasting powerful graphics processing
horsepower, give it a lead but competition is expected to
increase from Qualcomm (QCOM.O) and Texas Instruments TXN.N.
"Look for all of Nvidia's competitors to come out and throw
their hats in as well," Wang said. "You've got very large,
powerful technology companies that are all going for the same
Micron Technology Inc (MU.O) shares rose 7.1 percent to
$9.34 after investor relations vice president Kipp Bedard told
investors at a Needham & Company conference that a downturn in
prices for DRAM memory chips was turning around quickly.
Shares of Cisco (CSCO.O), Dell DELL.O and other
technology heavyweights also rose ahead of bellwether Intel's
kick-off of the technology sector's quarterly earnings season
Major technology companies are expected to keep up sales
and profit growth in 2011, although concerns about economic
growth in the United States and Europe could temper results.
PUSH INTO MOBILE
Nvidia, based in Santa Clara, California made its name
designing high-end graphics chips for PCs.
But as competition increased with Advanced Micro Devices
Inc AMD.N and Intel expanding into its market, Nvidia's
co-founder and Chief Executive Jen-Hsun Huang pushed into
mobile, combining central processors based on ARM Holdings Plc
ARM.L architecture with Nvidia's own graphics technology.
Wednesday's stock rise was Nvidia's largest in a single
session since October 2008, and its shares have doubled since
Interest in Nvidia was high in the options market, as well,
with more than 29,000 call options with a January strike price
of $22.50 trading on Wednesday, according to Caitlin Duffy,
equity options analyst at Interactive Brokers.
"The majority of the calls traded on the ask, indicating
buyers are dominating volume at that strike today," said Duffy.
Heavy activity was also seen at the $24 and $25 strike prices,
she said. Nvidia's shares closed at $23.35.
Validating Nvidia's focus on graphics technology, Intel
said earlier this week it would pay the company $1.5 billion to
license its patents, settling a legal dispute.
And at last week's Consumer Electronics Show (CES), Nvidia
said it was developing an ARM-based PC central processor,
directly challenging Intel in its own traditional market.
At the CES trade show, Motorola (MMI.N), LG (066570.KS),
Dell DELL.O, Acer APR.CN, Asus and Toshiba Corp (6502.T)
announced or showed smartphones and tablets using Tegra chips.
Adding to upheaval in the chip industry, Advanced Micro
Devices' chief executive, Dirk Meyer, left the company this
week due in part to the company's lack of a mobile strategy.
"People are digesting the Intel settlement, digesting CES
... Their primary competitor (AMD) just got a lot weaker," said
Alex Gauna, an analyst at JMP Securities. Micron makes NAND
flash memory used in smartphone and tablets.
(Additional reporting by David Gaffen in New York; Editing by
Andre Grenon and Steve Orlofsky)