Last week, bearishness accelerated, pulling semiconductor stocks lower. Intel (INTC) and Nvidia (NVDA)
traded at yearly lows. Markets are punishing the firms for no reason.
Intel delayed its graphics card launch until late summer. This is not a negative development. The
computer chip giant is better off refining its software drivers and selling high-quality GPUs. Customers
already waited for GPU prices to fall close to MSRPs. That is happening now. Had Intel rushed its launch,
it risked selling a buggy product at inflated prices.
Nvidia enjoys a steep premium for its RTX graphics cards. It is ahead of AMD (AMD) on ray tracing.
Consumers want Nvidia’s better performance cards for that reason. In addition, markets are anticipating
GPU server demand will weaken. This is a wrong assumption. Artificial Intelligence and machine learning
software require powerful GPU servers.
Nvidia is a growth company that investors should consider at these levels. Nvidia will always trade at a
premium because of its strong prospects in the next decade.
Intel is perpetually trading at value levels. The chip supplier fell behind AMD in the last few years. AMD
will command a premium for high-end desktop chips. AMD’s EPYC enjoys healthy demand. Intel will
eventually catch up to AMD, which will help INTC stock recover.
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