Intel playing catch up to Nvidia and AMD
Nvidia’s stock has also been a much better bet than Intel’s during the past five years, so much so that Nvidia’s market valuation of almost $635 billion is nearly three times Intel’s $219 billion.
And Nvidia has been a leading player, along with AMD, in graphics processing chips, a portion of the market that has grown rapidly thanks to gaming and cryptocurrency mining. Intel is now trying to play catch-up in the graphics chip market, and analysts see some hopeful signs for the company’s upcoming Arc family of processors.
Intel’s weak performance compared to AMD, Nvidia and the rest of the sector, is likely a key reason why former CEO Bob Swan stepped down last year to make way for Gelsinger’s return.
Wall Street analysts are acknowledging the apparent change in the sector’s momentum, too. Piper Sandler’s Harsh Kumar downgraded AMD’s stock Thursday, citing growth concerns and increased competition throughout the chip sector.
And Susquehanna International Group analyst Chris Rolland wrote in a report Thursday that the Arc chips, which will be primarily used for PC gaming, “could heat up” competition with AMD and Nvidia.
“At the right price point,” Rolland noted, Intel may be able to quickly “obtain share in an otherwise supply-constrained market.”
Intel is likely to give investors an update on supply chain issues when it reports earnings for the fourth quarter on Wednesday.