Away from the miners, chip designer Arm is continuing to slide on growing competition worries.
Intel is entering its key tablet and smartphone market, with Arm's move into servers not certain to make up the difference. Now a new competitor is emerging in Nvidia, and analyst Anil Doradla at William Blair said:
We believe the [Nvidia] announcement marks the entrance of a viable competitor in the graphics space to Arm. Over the past few years, Arm has emphasized its Mali graphics cores and has emerged as the primary competitor to Imagination Technologies. While Mali is still a fairly small portion of Arm's overall business (and Imagination Technologies remains the market leader), we believe Nvidia's licensing model could prove to be a credible competitor to Arm's graphics segment momentum.
Arm is down 37p to 798.5p as the market slumps on poor Chinese economic data and Ben Bernanke's comments that the US Federal Reserve could begin easing its bond buying programme later this year.
Meanwhile Imagination, which fell on Wednesday as profits dipped due to a slowdown in licensing, is down another 11.2p to 313p. Liberum Capital analyst Eoin Lambe said:
Following [Wednesday's] share price drop, Imagination's valuation is now more sensible. We are turning more constructive on [US acquisition] MIPS and Imagination's emerging intellectual property (IP) blocks. However, the sign of increased competition in the graphics IP market from Nvidia leaves us at a hold recommendation [and] 330p price target.
