© Reuters Intel (INTC) slumps after being outshined again by rival Nvidia (NVDA)
It was a spectacular day for Nvidia (NASDAQ:) shareholders. The stock surged 25% after the company forecasted quarterly guidance that was 50% higher than estimates due to surging demand for chips for artificial intelligence.
It was a much different story for Intel (NASDAQ:). Long ago decrowned by Nvidia as largest chipmaker, its shares slumped 5.75% today, vastly underperforming the which climbed over 6%.
Weakness in Intel was tied directly to comments from Nvidia management related to investment and “retooling” of data centers for AI globally and concern the investment will cannibalize standard data center server demand.
Wedbush analysts explained, “Growth in AI demand could yield greater CPU requirements and/or eventually create opportunity for [AMD and Intel] to gain some future AI silicon share. At the same time, we continue to see heightened AI investment as likely cannibalizing standard data center server demand in the near-term.”
Overall, Wedbush views Nvidia’s forecast as mixed for Intel.
So far Intel has had no real answer to Nvidia’s dominance of high-end GPUs, and this is being reflected in the shares. Since the start of the year, NVDA’s stock has climbed 260%. Intel shares are higher by just 4%.
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