Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

NVIDIA Corporation (NVDA) Shield Delayed: Does It Matter?

Another concern is inventory risk. While initial shipments of Shield were probably fairly modest, it could still be expensive to fix or replace all of those units. That’s especially troubling when the device is not expected to earn very high profits; NVIDIA recently dropped the price from $349 to $299 to stimulate consumer demand .

Foolish bottom line

It’s possible that this incident will just be a slight bump in the road for NVIDIA. After all, gaming devices are not NVIDIA’s bread and butter — the company is really relying on its Tegra and Icera mobile chips and its GRID cloud-based graphics cards for future growth. Shield is just a sideshow, at least for now.

The danger for NVIDIA investors is if Shield becomes a costly sideshow. Investors should definitely keep an eye on the company’s margins in its next quarterly report, and look out for any disclosures about losses related to this quality issue.

That said, in light of the company’s fairly low valuation, good prospects in its core areas of focus, and its significant program to return cash to shareholders, the stock still looks attractive at current levels. If NVIDIA’s management can maintain its focus on the company’s main growth drivers — the upcoming Tegra 4i chip and the rollout of GRID servers — the benefits should overshadow any headwinds from Shield.

The article NVIDIA Shield Delayed: Does It Matter? originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg owns shares of NVIDIA. The Motley Fool recommends NVIDIA.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.