Is Intel poised for a significant comeback this decade following Nvidia's multibillion-dollar endorsement?
In a significant move for the tech industry, Intel and Nvidia have struck a deal to incorporate Nvidia's proprietary technology into custom chips for data centers and PC processors. This collaboration could potentially lead to a hybrid of Nvidia's and Intel's best chip features in upcoming products.
The deal, which includes access to Nvidia's high-speed NVLink data transfer links for Intel's upcoming data center processors, is expected to help Intel catch up to arch rivals Advanced Micro Devices and Qualcomm in many ways. Intel's chipsets for personal computers will now have access to Nvidia's top-of-the-line GeForce RX series of graphics technology.
David Zinsner, the CEO of Intel who initiated cooperation with Nvidia and supported costly investments, is spearheading this strategic partnership. Nvidia is investing $5 billion in Intel stock at $23.28 per share as part of the deal. This investment supports Intel's infrastructure buildout, resulting in approximately 3.4% stock dilution.
As of today, Nvidia's current stock price stands at $176.84, with a market cap of $4.3 trillion. The day's range for Nvidia's stock is $175.18 - $178.08, and the 52-week range is $86.62 - $184.48. The volume for Nvidia's stock is 237,182,143, with an average volume of 175,475,110.
Nvidia will also bring its industry-standard CUDA programming language to the table in the collaboration. The company's gross margin is 69.85%, and the dividend yield is 0.02%.
Meanwhile, Intel is currently trading at $29.59, with a market cap of $138 billion. The company has invested over $25 billion in capital expenses for fiscal years 2022, 2023, and 2024, and plans to spend an additional $108 billion on infrastructure construction and $79 billion on research and development costs over the last five years.
The Trump administration invested $8.9 billion in Intel stock, partly based on the Biden government's CHIPS Act. The Nvidia-powered range of custom chips could spark a terrific turnaround for Intel, as evidenced by the stock jumping to a new 52-week high on the news. The deal could potentially signal a game-changing turnaround for Intel.
