Five things to watch in markets in the week ahead
Investing.com - Intel (NASDAQ:INTC) stock surged in pre-market trading Thursday after announcing Nvidia (NASDAQ:NVDA) will take a 4.9% stake in the company by investing $5 billion at $23.28 per share. The news impacts AMD (NASDAQ:AMD), currently valued at $250 billion with a P/E ratio of 92, according to InvestingPro data.
The strategic partnership includes Intel building custom x86 CPUs for Nvidia’s AI infrastructure, while Nvidia will integrate its NVLink technology into the CPU-GPU platform. The companies will collaborate on go-to-market strategies for these new AI solutions.
Intel will also integrate Nvidia’s RTX GPU chiplet into Intel’s x86-based client system-on-chips (SoCs), with Intel taking these client SoCs to market. This collaboration could help Intel’s Client Computing Group division regain market share from AMD (NASDAQ:AMD).
Lynx Equity described the partnership as "clearly a negative for AMD," noting that AMD’s previous advantage was that its x86 CPU on its AI platform could run traditional CPU functions. The firm indicated that Nvidia’s AI platform currently uses ARM architecture with limited CPU functionality.
The deal represents a significant vote of confidence in Intel, following recent investments from the U.S. government and SoftBank. Lynx Equity suggested Intel "pulls back from the brink of existential crisis" with these strategic backers, though noting "the road to recovery is long and filled with potholes."
In other recent news, Advanced Micro Devices (AMD) has seen a series of updates from various analyst firms. Piper Sandler reiterated its Overweight rating with a price target of $190, citing optimism about AMD’s GPU prospects through the second half of 2025 and into 2026. Conversely, Erste Group downgraded AMD from Buy to Hold, expressing concerns over operating margins that are lower than the sector average and a high P/E ratio. HSBC also adjusted its stance, lowering the price target to $185 from $200 due to revised assumptions on the average selling price of AMD’s MI355 chip. Despite these concerns, Truist Securities maintained its Buy rating with a $213 price target, noting a shift in customer perception of AMD as a potential partner in the data center and AI markets. These developments reflect varying perspectives on AMD’s financial health and future growth potential.
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