The rate at which the world is learning, and the increase of technology that can be seen within the past mere decades is outstanding, and only going to become exponentially faster. That being said, the world of computing is also undergoing a massive shift, but with that, the company that has always been around to make the brains behind the everyday computer has not shifted as fast as its competitors.
Jefferies equity analyst concluded Monday that Intel Corp. INTC stands to take a hit as a data-center business giant, while a new computing paradigm is phased in – one that is focused on artificial intelligence and connected devices. Nvidia Corp. NVDA is said to be best-positioned to take over for this changing of landscape.
Nvidia is “years ahead of its competition,” as Lipacis wrote, and Intel has the most to lose as it has the most dominant market share in the data center. Intel stock downgraded on Monday, from hold to underperform, and following shortly, Intel hit a 52-week low of $33.23, before closing down 0.7% at $33.65. Shares have dropped 6% in the past three months, as the S&P500 has gained 3%.
If Lipacis’ theory that every 15 years, there is a shift in computing technology and the way the world handles it (ie. minicomputers to personal computers to mobile phones) is true, then Intel, who was previously a commanding player will split its dominance to other different chip makers.
Nvidia is currently ahead because of it being the architectural company who has created the hardware and software for parallel processing, which is much more geared for the future. Nvidia may be the first major tech company to make large financial gains from AI. The company has sparked a huge jump, up 57.2% in the past three months, and more than 200% in the past year.
What’s more about this company is that with its AI focus, they can tackle problems such as autonomous-driving, which with the deal including Toyota Motor Corp made in May, could bring in anywhere from between $1 to $2 billion in revenue within the next two years.