Intel Stock Drops after Nvidia Announces a New Server Chip

Nvidia Corp. has unveiled their first-ever microprocessors, which are intended to push into Intel Corp’s lucrative market with a chip that is aimed at handling some of the most complicated computing work. Intel shares fell around 4% as this occurred, which is huge.

Now, on the flipside, Nvidia’s stock gained 6% after the company said that the first-quarter revenue is tracking above the previous forecast.

Nvidia logo

Nvidia has actually designed a central processing unit, otherwise known as a CPU which is based on technology from Arm Ltd., which is a company that it has been trying to acquire from Japan’s SoftBank Group Corp.

Furthermore, the Swiss National Supercomputing Center, as well as the U.S. Department of Energy’s Los Alamos National Laboratory, will be the first-ever to use the chips throughout their computer lineup, which Nvidia announced at an online event.

When it comes to Nvidia as a company, they have a reputation for their primary focus in graphics processing units, otherwise known as GPUs, that are used to power most video games as well as intensive computing tasks in many data centers across the globe. CPUs are this type of chip that has a more general role and can do many tasks, most specifically, running the operating system itself. Nvidia is essentially opening a new path for themselves, which could bring in a lot more revenue for them.

The Founder, as well as the Chief Executive Officer Jensen Huang, has made Nvidia one of the most valuable U.S. chipmakers by delivering on the promise to give the graphic chips a major role in the explosion of cloud computing, and as such, the data center revenue contributes to 40% of the company’s total sales. By contrast, it was at 7% five years ago.

Intel has more than 90% of the market when it comes to server processors. These have a price point of $10.000 per processor.

The CPU is named Grace. It is named after the late pioneering computer scientist known as Grace Hopper and is designed to work closely with the Nvidia graphics chips in order to better handle some of the new computer tasks that will be 10 times faster than those who currently use a combination of Nvidia GPUs with Intel CPUs. This new product is intended to be available at the start of 2023, according to Nvidia.

When it comes to the only other maker of the X86 CPUs and Graphics Card, the only other company is Advanced Micro Devices Inc.

Hans Mosesmann, an analyst at Rosenblatt Securities had this to say: “The takeaway is that Nvidia is serious about CPUs and will not be constrained by X86 owned by Intel and AMD. The level of platform innovation is mind-boggling and something that silicon competitors will be tasked to match for many, many years to come.”

At the end of April, the revenue is expected to be higher than $5.3 billion, according to a projection from Nvidia on February the 24th.

Nvidia Chief Financial Officer Colette Kress had the following to say: “We are experiencing broad-based strength, with all our market platforms driving upside to our initial outlook. Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year.”

Sara Mirchevska
Sara is a tech enthusiast and writer with over five years of experience. She is studying at UACS in North Macedonia. Sara is a creative person who is looking to become a high-tech writer over the years that come. She wants to be up to date with everything in the world that is related to technology and hosting, and she is the one that provides us with news in the web hosting world.

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"Intel Stock Drops after Nvidia Announces a New Server Chip"

Intel Stock Drops after Nvidia Announces a New Server Chip