How to Approach Intel Stock in the Wake of Nvidia’s Earnings
Nvidia once again topped analyst expectations in its recent earnings report, largely bolstered by a surge in gaming revenues despite missing estimates on the critical data center segment. With Nvidia´s upbeat guidance nonetheless falling short of consensus and the core data center category lagging, investors are reassessing the competitive landscape among chipmakers riding the Artificial Intelligence wave.
Intel´s future prospects hinge heavily on the staying power of the Artificial Intelligence-driven spending cycle, particularly as hyperscale cloud providers are projected to invest billions in infrastructure through 2025. However, most of that capital is not expected to flow Intel´s way. Q1 2025 data revealed a slowdown in data center leasing as operators sought cheaper capacity, hinting at broader caution in capital expenditures. Intel’s main opportunity could arise if Nvidia´s tight chip supply drives customers toward alternative accelerators like Intel’s Gaudi 3, which claims 50% better inference performance and 40% higher efficiency than Nvidia’s H100. Still, industry demand remains locked up, with Nvidia’s Blackwell chips already fully booked for the year.
Despite technical strengths on paper, Intel is grappling with steep declines in profitability and revenue—a concerning trend even as the Artificial Intelligence sector is booming. The stock trades at 1.65 times sales, far below its historical average of 2.88, reflecting a 13.7% annual revenue decline and a near 68% drop in EBITDA over the last three years. In practice, customers have favored AMD and even legacy Nvidia chips for their better integration. While Intel´s recovery under its current CEO could take years, the stock may offer a short-term rebound play given it remains undervalued relative to peers. Still, for long-term investors, expectations should remain muted: significant Intel gains are unlikely over the next two to three years as competitors maintain a significant technological and ecosystem lead.