On June 8, 2022, Intel’s (INTC) executives issued cautious comments about its quarter ahead. It cited the
obvious: worsening economic conditions. Markets reacted by sending the stock to multi-year lows.
Intel cited customers reducing their inventory and China’s reopening disruption. The selling spread to
AMD and Nvidia (NVDA) stock. Those two firms only have high valuations as their fault. But both firms
have tremendous growth prospects compared to Intel.
AMD acquired Xilinx and Pensando to expand its addressable market. This will weigh on shareholders
with the stock dilution but will pay off.
Nvidia is about to refresh its graphics card to the RTX 40 series. It increased production of the RTX 30
series, which is lowering prices closer to MSRP. Gamers no longer need to wait for prices to fall. Nvidia’s
production increase does not come without risk. A glut in GPUs will flood the market. Ethereum (ETHE)
is switching to Proof of Stake. ETHE no longer needs power-hungry GPUs for mining.
Nvidia could end up with more GPU supply than demand. In addition, gamers may spend less. High
inflation rates will reprioritize their spending on necessities. This will cause a delay in GPU purchases.
Intel is in deep value territory again. Its drop should end. AMD and Nvidia have strong prospects.
Despite the volatility, both stocks are appealing to long-term investors.
