Last week, Nvidia (NASDAQ:NVDA) ended the week at over $419 and a market capitalization above that of Intel (NASDAQ:INTC). This is a symbolic shift that reminds investors that cloud graphic computing demand is faster growing than CPUs.
Investors may speculate that Advanced Micro Devices (NASDAQ:AMD) will dethrone Intel on market cap but this is unlikely. AMD’s PC and server CPUs compete with Intel’s markets. But Intel broadened its business in other fast-growing markets. Its Mobileye acquisition shifts Intel’s growth prospects to the automotive market. As carmakers add more technology to vehicles, demand for solutions such as advanced driver assist systems (ADAS) will grow.
More vehicles are getting automatic emergency braking and lane-keeping assistance features as standard options. So, as these options move from premium luxury vehicles to the mainstream, Intel’s Mobileye division will post higher revenues.
In the CPU space, Intel is not sitting still. Its 14-nm and smaller manufacturing capabilities lag that of AMD. But Intel still has the support of its distribution partners like Dell and Lenovo to sell more on volume than AMD.
Intel has time to catch up with AMD on CPUs. It will not compete with Nvidia in GPUs and it does not need to. I would rate Intel as a stock to continue holding.
