Nvidia’s shares surged Thursday after it issued a sales forecast that dwarfed Wall Street’s expectations.
The chipmaker’s stock has gained a staggering 160% within the first five months of this year.
Longtime rival Intel is up just 4% over the same period.
Big-name investors are going all-in on AI
1. Bill Ackman
2. Chase Coleman
3. Stanley Druckenmiller
4. Paul Tudor Jones
5. Morgan Stanley
6. David Tepper
7. Cathie Wood
Nvidia‘s AI-fueled share-price surge has left its longtime rival Intel in the dust.
The California-based chipmaker’s stock soared 24% on Thursday after it issued a second-quarter sales forecast that crushed Wall Street’s expectations. Investors piled in, betting the company would benefit from the current AI boom.
Nvidia’s shares are now up 160% in 2023, making it comfortably the best performer in the benchmark S&P 500 year-to-date.
Other AI-related stocks also surged on the back of Nvidia’s stellar results – but Intel fell 5.5%, slashing its gains for the year to below 4%.
The two companies have also diverged in terms of market capitalization.
Nvidia’s total market value has soared from $364 billion to $939 billion in 2023, according to data from CompaniesMarketCap – whereas Intel’s has only climbed from $109 billion to $114 billion in the same period.
AI appears to be responsible for the longtime rivals’ mixed fortunes.
Nvidia is the leading producer of the graphics chips needed for high-intensity AI computing, meaning it was well-positioned when the rise of ChatGPT created an “iPhone of AI” moment, CEO Jensen Huang said recently.
In contrast, Intel’s semiconductors tend to be used in data centers – which many have warned could be rendered obsolete by the rise of generative AI.
By not matching its rival’s AI efforts, Intel has “missed the boat, which has hit stock performance and valuation and growth potential,” ROBO Global analyst Zeno Mercer told Bloomberg.