The investment cases on the world’s three highest-profile chip players couldn’t be more different right now.
Watching the CEOs at Nvidia (NVDA), Advanced Micro Devices (AMD), and Intel (INTC) wax poetic about their new chips at CES this week reminded me of something important. These are wildly different tech companies, despite all of them trying to pump up their AI chipmaking prowess.
Nvidia and its black alligator leather jacket-wearing CEO Jensen Huang are leading the pack. What Huang unveiled this week with its Vera Rubin chips is nothing short of mind-bending. The fact that he reiterated demand is “really high” was also music to the ears of the AI bulls.
Meanwhile, AMD CEO Lisa Su is clearly putting up a great fight against Nvidia. She solidified the company’s second-place status on the AI chip front this week.
Well, then there is Intel and CEO Lip-Bu Tan aiming to do something of relevance in AI chips (see Panther Lake news) and attempting to turn itself around with the backing of Nvidia and the US government.
All of this raises a key question for investors: What’s the best way to profit off the AI revolution? Do you stay long on a leader like Nvidia? Do you wager AMD can take more market share away than is currently priced into the stock? Do you buy into any form of Intel turnaround, seeing as the government will not tolerate stretches of weak results?
We went around the horn for some context on each of these three stocks during Yahoo Finance’s Opening Bid in the wake of CES.
“You got to think where Intel is today, given the Trump and Nvidia backing, is a whole different story than a year ago. To me, the trade for semis is the godfather of AI in Jensen Huang and Nvidia. You got to own everything Lisa Su is doing at AMD. Intel, I think, that has to be a piece of the portfolio just given that they’re going to play more and more of a role in AI revolution. You cannot just count them out.”
“For the AI trade, we would stick with what’s going to work in a wide range of scenarios, which is Microsoft (MSFT) and Nvidia, whether we’re late in the cycle or early in the cycle, those two have created most of the value so far, and they’ll continue to create most of the value … We would probably stay away from marginal players in the data center space.
“In the semi space, we actually think there’s still opportunities in software. You can’t do AI in an enterprise context without having all the data in one place. That’s why you need Snowflake (SNOW). You can’t do AI in an enterprise context without observing the applications that are running that are more complicated than ever. You need Datadog (DDOG) for that.”
“I will give you one bullish note about Intel: their advanced packaging technology. This is what Jensen Huang had mentioned when they made that $5 billion investment in Intel. This is a very, very interesting space. I’ve been geeking out a little bit on this. I’m nowhere near an engineer, but I will tell you that these are chiplets that they basically stitch together, and they stack them together. And this is an interesting area that Intel has that technology.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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