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Report: Nvidia hit by S&P ratings downgrade

Adding to the graphics chipmaker's woes, Standard & Poor's ratings services lowered its ratings on Nvidia, according to a report.

Nvidia was hit by a Standard & Poor's ratings downgrade Wednesday, according to a Dow Jones report, adding to the graphics chipmaker's woes.

Standard & Poor's ratings services ratcheted down its outlook on Nvidia from positive to stable, according to Dow Jones. S&P cited concerns about the graphics chipmaker's sinking revenue and profitability.

The ratings agency maintains a junk-level BB- grade on the company, and S&P noted that revenues from Nvidia's recent efforts to expand into cell phones, handheld devices, and supercomputer applications is small, according to Dow Jones. Nvidia also faces new competition from Intel's upcoming Larrabee graphics chip, S&P said.

In addition, Nvidia has been grappling with graphics chip issues on laptops. Apple issued a fix Wednesday for the graphics problems suffered by some owners of the new 17-inch MacBook Pro.

Not everything was bad news for Nvidia Wednesday, however. Ironically, on the same day, Broadpoint AmTech analyst Doug Freedman upgraded Nvidia to "buy" from "neutral" saying that "our checks indicate an improving top-line allowing the company to grow from a larger revenue the trough appears less deep than originally thought," he wrote in a research note.

"Although we remain cautious on gross margin mix we do believe that (operating expenditures) are ahead of expectations, potentially adding leverage to our estimates," Freedman said.