Street Calls of the Week
Investing.com -- AMD stock dropped 5% Thursday morning after competitors Nvidia and Intel revealed a strategic partnership to jointly develop AI infrastructure and personal computing products.
The collaboration between AMD’s two main rivals sent shockwaves through the semiconductor industry, with Intel shares surging 30% while AMD investors showed concern about potential competitive challenges. The partnership will focus on connecting Nvidia and Intel architectures using Nvidia’s NVLink technology, combining Nvidia’s AI expertise with Intel’s CPU technologies.
Under the agreement, Intel will manufacture custom x86 CPUs for Nvidia’s AI infrastructure platforms. For the personal computing market, Intel will create x86 system-on-chips that integrate Nvidia RTX GPU chiplets, producing products that directly compete with AMD’s offerings in both data center and consumer segments.
Nvidia also announced a $5 billion investment in Intel common stock at $23.28 per share, further strengthening the alliance between the two technology companies.
The collaboration creates a significant competitive challenge for AMD, which has been gaining ground in both CPU and GPU markets. AMD has established itself as a strong competitor to both Intel in CPUs and Nvidia in GPUs, particularly in AI applications.
Mizuho TMT Sector Specialist Jordan Klein wrote, "THIS IS BAD FOR AMD and will add pressure to ARM! No way to sugar coat or look past that NVDA could have gone with AMD who has CPU and gaming for PCs, but had to buy into INTC due to Trump. NVDA uses ARM for their Grace CPU, but now they moving towards x86 and INTC to offer a compliment and some next gen products."
Klein added, "To me this sort of pressures and squeezes AMD overall a lot more. They face intense pressure vs NDVA for GPUs. AVGO dominates on custom silicon that AMD does not have. And now you have a lot more pressure and risks to your GPU / CPU product platform from NVDA & INTC."
The partnership announcement comes as competition in AI computing infrastructure has intensified, with AMD working to strengthen its position in the rapidly growing AI chip market.