Stock Market Analysis

Nvidia Competitors: 2 Rivals In The Crucial Chip Making Sector

In a world of GPUs and semiconductors, Nvidia seems to be a top stock, but which of these alternatives should you add to your portfolio?

Nvidia (NASDAQ: NVDA) is a popular company and a hot name for gamers, A.I., and mobile computing alike. In fact, Nvidia is fast becoming a favorite stock of many as it goes from strength to strength, reeling in clients such as Sony, Toyota, and Tesla

However, if you want to hedge your bets or don’t feel like Nvidia quite fits your portfolio, here are the top three competitors to Nvidia which might prove to be exactly what you are looking for. 

1. Advanced Micro Devices

Any esports investor or gaming enthusiast worth their salt knows of the longstanding competition between Advanced Micro Devices (NASDAQ: AMD) and Nvidia. Whilst Nvidia may be the one to beat in the best graphics processing units (GPUs), it shares the market with AMD and Intel (NASDAQ: INTC). 

AMD has managed to outpace Nvidia in the past 3 years as it tends to focus on lower and mid-range priced GPUs. In addition, it was announced last year that Advanced Micro Devices will work with Hewlett Packard Enterprises on the El Capitan Project, powering the world’s fastest supercomputer.

Advanced Micro Devices has had a good 2021 so far. Its Q1 quarterly figures showed a gross margin of 46% — the highest it has had in 8 years. This could be due to coronavirus-induced entertainment sales, such as new gaming hardware. However, with its stock up nearly 3,000% in the last 5 years, AMD has shown serious growth. With operating income up 274% YoY and net income hitting $555 million in Q1, things are looking good for AMD.

2. Intel

By the end of 2020, Intel had a 69% market share of PC GPUs whilst AMD held 17% and Nvidia held 15%. For this last quarter, Intel reported a rocky Q1. Although Intel’s earnings per share were significantly higher than analyst estimates and the company’s own forecast, it showed deceleration from the same period last year. EPS came in at $1.39 on revenue of $18.57 billion.

Since 2017, Intel has been slowly losing ground to competitors in the CPU market, but investors shouldn’t dismiss this enterprising giant so quickly — in laptops alone, Intel accounts for roughly 85% of CPUs in 2020. This will change this year though after Apple began producing its own chips, breaking up a 14-year partnership between the two companies. 

In other markets, Intel could be well-placed to rival Nvidia in the future of autonomous vehicles as it spent $900 million on ‘Moovit’ last year, an Israeli mobility as a service (MaaS), AI solutions company. Intel already owned ‘Mobileye’ as well as several computer vision companies. These assets including a driverless platform — co-developed with the likes of BMW, Fiat Chrysler, and Delphi — sets Intel up as a potential powerhouse in the driverless car markets going forward. 

MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

Poppy Murray
Poppy is a contributing writer to MyWallSt. Poppy likes companies that go the extra mile. Her favorite stock is Amazon because she is fond of its innovation, variety, and creative solutions to sustainability.