The market, it seems, isn’t terribly impressed with Nvidia’s recent RTX family, either. Shares of the company’s stock have slipped in recent days, particularly Friday, after Morgan Stanley said the performance of the latest RTX video cards hadn’t met its expectations.
“As review embargos broke for the new gaming products, performance improvements in older games is not the leap we had initially hoped for,” Morgan Stanley analyst Joseph Moore said in a note to clients on Thursday according to CNBC. “Performance boost on older games that do not incorporate advanced features is somewhat below our initial expectations, and review recommendations are mixed given higher price points.
“We are surprised that the RTX 2080 is only slightly better than the 1080 Ti, which has been available for over a year and is slightly less expensive,” he said. “With higher clock speeds, higher core count, and 40 percent higher memory bandwidth, we had expected a bigger boost.”
As with Micron on Friday, the fundamentals of Nvidia’s gaming business are expected to stay healthy and the $273 target price that Moore set on the stock reinforces that interpretation. There’s no serious risk here, as far as a downturn in Nvidia’s GPU business, because Nvidia currently has a lock on the high end of the market. The problem is, the company hasn’t articulated a good reason for anyone who isn’t in the market for a $1,200 GPU to upgrade.
Focusing so heavily on the RTX 2080 Ti may have been a double-edged sword. On the one hand, this massive GPU can crank out high frame rates and drive 4K at or above 60fps. On the other, it’s $500 more than the flagship it replaces. A 1.71x price increase from the GTX 1080 Ti to the RTX 2080 Ti for a ~1.3x performance increase is a lousy deal, but it’s virtually the only deal in the stack when the 1080 Ti is almost as fast as the RTX 2080 with more RAM and a lower price point. The new cards are also less power efficient, with substantially higher power consumption even when not using their additional resources to do useful work in games.
The really interesting question in all this is whether the Turing family should even be considered a real GPU “family” at all. With 7nm ramping at TSMC, it’s fair to ask if Nvidia really plans to ramp an entire new set of cores on 12nm, including a new RTX 2060 and 2050 (parts we haven’t even heard of yet), or if the goal is to launch just new high-end chips for the 2070, 2080, and 2080 Ti, before following up with a new 7nm family in 2019 or 2020. Either move would make Pascal the longest-lived high-end GPU family on record, but with AMD lagging and Intel not expected in-market until 2020, Nvidia has time to plan its moves carefully. The company’s consumer upside on Turing may be limited, but that likely won’t matter with strong Tesla adoption and continued growth in the HPC market.