Five things to watch in markets in the week ahead
Investing.com -- Intel Corporation (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA) announced a collaboration to develop custom data center and PC products, with Nvidia investing $5 billion in Intel’s common stock at $23.28 per share.
The partnership will focus on connecting Nvidia and Intel architectures using Nvidia’s NVLink technology, combining Nvidia’s AI and accelerated computing capabilities with Intel’s CPU technologies and x86 ecosystem.
For data centers, Intel will build Nvidia-custom x86 CPUs that Nvidia will integrate into its AI infrastructure platforms. In personal computing, Intel will develop x86 system-on-chips that integrate Nvidia RTX GPU chiplets for a range of PCs.
The deal could create significant challenges for several companies in the semiconductor space:
Mizuho TMT Sector Specialist Jordan Klein noted the partnership is "bad for AMD" as Nvidia chose Intel over AMD despite AMD having both CPU and gaming capabilities for PCs. Klein suggested this would add pressure to AMD’s position, as the company already faces "intense pressure vs NVDA for GPUs" and now faces "a lot more pressure and risks to your GPU/CPU product platform from NVDA & INTC."
The partnership could also help Intel regain lost market share in PCs through Nvidia’s gaming GPU technology, potentially limiting AMD’s future share gains against Intel in the CPU market.
ARM
The collaboration puts pressure on ARM as Nvidia shifts toward x86 architecture and Intel. Klein pointed out that while Nvidia currently uses ARM for their Grace CPU, they are now "moving towards x86 and INTC to offer a compliment and some next gen products."
Vital Knowledge also noted the partnership’s implications, though they didn’t specify demand levels for joint Nvidia/x86 chips.
Klein indicated the deal is "not great for MRVL either" as they could potentially lose more business in the data center market to a stronger Intel backed by Nvidia. While he suggested the impact might not be material, it could make "the upside scenarios for MRVL look smaller."
Taiwan Semiconductor Manufacturing
While not directly mentioned as a major loser, Vital Knowledge noted that Nvidia is "NOT committing to having its standalone chips built in Intel fabs," which means the news "shouldn’t be negative for TSMC." However, the new joint Nvidia/Intel products could help fill capacity in Intel’s fabs, assuming strong demand materializes.
LYNX Equity Strategies’ KC Rajkumar viewed the partnership as positive for semiconductor equipment manufacturers ASML, AMAT, LRCX, and KLAC, while negative for AMD.