Intel and AMD Overshadowed by Nvidia, Watch Closely in the Second Half of the Year

Increased Demand for AI Computer Chips
Intel and AMD Benefit from Slowing AI Infrastructure Investment Growth

[Image source=Reuters Yonhap News]

Intel and AMD, which had been overshadowed by AI chip leader Nvidia, are analyzed to potentially become AI theme stocks in the second half of this year. This is drawing attention as Wall Street opinions are gradually emerging that Nvidia's stock price will find it difficult to show the same upward momentum as before.

According to MarketWatch on the 8th (local time), Ben Wright, an analyst at Melius Research, forecasted in a memo that Intel and AMD would benefit from increased demand for AI computer chips and a reflection effect due to a slowdown in AI infrastructure investment.

On the same day in the New York stock market, Intel and AMD stocks closed up 6.15% and 3.95%, respectively. However, since the beginning of this year, Intel has fallen 28.89%, and AMD has risen 28.94%, but in terms of growth rate, both lag significantly behind Nvidia (166.14%).

Wright analyzed that demand for Intel and AMD chips used in Microsoft's (MS) AI PCs will begin to increase significantly from the second half of the year. The core feature of MS's recently released ‘Copilot+ PC’ is Recall, which helps users find files and other data on their PC, but the launch of this feature has been temporarily postponed. He stated, “Since Recall is a ‘killer app,’ Intel’s Luna Lake and AMD’s Strix Point will eventually be used in the second half of the year,” adding, “As a result, stock prices could rise significantly in the fourth quarter.”

The potential slowdown in AI infrastructure investment by cloud companies from the second half of this year was also cited as a positive factor for Intel and AMD. It is explained that a rotation from Nvidia to Intel and AMD stocks could occur. In this process, Apple, Dell Technologies, and Amkor Technology are also expected to benefit.

Wright also analyzed that there is a possibility of a rebound in existing server demand based on Intel’s Xeon chips and AMD’s Torino chips. In the global server chip market, Intel holds 80% and AMD 20%, making server chips their main revenue source. Additionally, he diagnosed that the stock outlook for software company IBM is also bright in the second half of the year.

Meanwhile, recent opinions on Wall Street suggest that Nvidia is unlikely to show a significant upward trend for the time being, attracting attention.

Joseph Moore, an analyst at Morgan Stanley, raised Nvidia’s target stock price from $116 to $144 on the same day but explained, “Since the market capitalization has surged, the market is setting higher standards for Nvidia’s performance, which is a risk.” He pointed out that the complexity of Nvidia’s new AI accelerator, Blackwell, expected to be released as early as October, could be a challenge. On the 5th, New Street Research downgraded its investment opinion on Nvidia from buy to neutral, citing the rapid surge in Nvidia’s stock price in a short period.

This content was produced with the assistance of AI translation services.