Last year's AI surge shocked tech. OpenAI's Chat GPT revived interest in AI and showed its progress. Many corporations have moved to the growing sector to get a piece of the $200 billion pie. Grand View Research predicts that the AI market would increase 37% year until 2030, reaching a valuation of $2 trillion by then.
Thus, AI investments are still possible, and semiconductor stocks are particularly appealing. These businesses are building hardware to train and run AI models, boosting their chances of profiting from the AI market's tailwinds for years.
AI potential exists for Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC), leading chipmakers. However, both companies are at quite different AI stages, which may give one more room to grow. Let's compare these chipmakers to see which AI stock is stronger right now: Nvidia or Intel.
Nvidia Nvidia's business soared last year. This stock is 230% higher than last April. Due to rising semiconductor sales, its quarterly revenue and operating income rose 207% and 536%, respectively. Nvidia dominated the AI GPU market in 2023 while its competitors battled to catch up. Its lead start helped Nvidia capture 90% of the AI GPU market due to rising demand.
Some analysts question Nvidia's future after its spectacular climb. Its stock has risen 60% in three months, surprising forecasts. Nvidia's free cash flow has surged 430% in the last year to over $27 billion, demonstrating it can invest in AI and maintain market dominance. I wouldn't gamble against AI's long-term potential and Nvidia's market dominance.
Intel Nvidia's AI expertise makes it a reliable choice. However, Intel, a younger business with more growth potential, may be worth considering. Many obstacles have faced Intel in recent years. Its stock has dropped 45% in the past three years after losing CPU market share and breaking a decade-long cooperation with Apple.
Intel is implementing substantial business adjustments that could help company recover in the coming years. Intel declared a "fundamental shift" to its operations last June, adopting an internal foundry approach to save $10 billion by 2025.
Intel is also into AI. The business released AI chips in December 2023, including Gaudi3, a GPU aimed to compete with Nvidia. Intel introduced Core Ultra CPUs and Xeon server chips with neural processing units for AI program efficiency. Intel is recovering, but its financials will take time to show. Thus, patient investors ready to wait for at least a decade should invest in Intel.
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