NVIDIA Overtakes Intel, Becomes Most Valuable Chipmaker In US

NVIDIA's shares rose 2.3% in afternoon trading on Wednesday to a record $404.
Chris Young

NVIDIA has overtaken Intel, for the first time in the illustrious companies' history. In doing so, Nvidia has become the most valuable chipmaker in the U.S.

The graphic component maker’s market capitalization currently stands at $248 billion, just above the $246 billion value of Intel, which was once the world’s leading chipmaker.


Differing fortunes

In recent years, Nvidia's stock has been amongst Wall Street's best performers as the company has expanded into data centers, artificial intelligence (AI), and automobiles, Reuters explains.

Intel, on the other hand, has struggled to diversify after having previously dominated in processors for PCs and servers for decades. Recent forays in the smartphone industry, for example, have been flagged as missteps by trade experts.

Notably, while Intel's stock has lost almost 3 percent in 2020, NVIDIA's has surged an impressive 68 percent. The worldwide shift to remote work during the coronavirus pandemic will likely continue to spur rapid growth in Nvidia's data center business.

Strong competition worldwide

As Reuters points out, in recent years, Intel has also faced strong competition from global chipmakers and has seen its market capitalization fall below those of South Korea's Samsung Electronics and Taiwan Semiconductor Manufacturing Co.

Intel last year acquired Israeli chipmaker startup Habana Labs for $2 billion in a bid to solidify their place in the Israeli market and also advance their AI strategy. NVIDIA's DIB-R artificial intelligence, meanwhile, can predict a complete 3D version of a 2D image.

Despite NVIDIA's impressive stock rise, its sales remain a fraction of Intel’s. Analysts expect NVIDIA's revenue to rise 34% in its current fiscal year to $14.6 billion, while Intel’s 2020 revenue is expected to increase 2.5% to $73.8 billion, according to Refinitiv. Who will win the chipmaker wars?

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