Nvidia topples Intel as most valuable US chipmaker

Graphics card manufacturer Nvidia recently toppled Intel as the most valuable chip maker in the United States.

This is the first time that Nvidia took the top spot in the U.S. semiconductor industry. The company’s rise to the top is thanks to its strong performance on the market. The company’s share rose by 2.3% topping at $404, which puts its market capitalization at around $248 billion.

On the other hand, Intel is performing quite well for its self. Nevertheless, the graphics card manufacturer outvalued Intel that has a market value of $246 billion.

Strong market performance

Nvidia has posted quite a strong market performance over the past few quarters. The company is mostly associated with graphics cards for the personal computer industry. However, the company has also ventured into data centers, artificial intelligence, and the auto industry.

On the other hand, Intel has struggled lately, especially with the recent surge of its rival AMD. For decades, Intel dominated the processor market until the resurgence of AMD. Lately, the company is struggling to diversify its portfolio to cope up with the competition.

Another blow in Intel’s dominance came from Apple’s decision to drop it as its primary processor provider. Apple decided to source its processors in-house and later announced it is transitioning into the ARM architecture. Apple is a significant force in the market, and it affected Intel’s position.

Since January, Intel’s stock price dropped by almost three percent. On the contrary, Nvidia’s stock gained as much as 68 percent.

The effect of coronavirus

Some market analysts have noted that the lockdown caused by the coronavirus forced people to work at home. This created a demand for remote software and utilities, which in turn boosted the data center industry. Market experts have pointed out that the coronavirus pandemic has boosted Nvidia’s data center business.

Intel is facing a lot of competitors from foreign rivals lately. The company’s market value has fallen below Samsung and Taiwan Semiconductor Manufacturing. The company also failed to capitalize on the smartphone hardware market.

Recently, Intel spent heavily to make its 10nm processor architecture a reality. The company spent quite a fortune in the development of its new Tiger Lake line of processors.

Despite these impressive numbers for Nvidia, Intel still has the upper hand in terms of revenue. Market experts estimate Intel’s revenue to reach $73.8 billion this year. On the other hand, Nvidia is expected to have a revenue of about $14 billion this year.

Image courtesy of Kiklas/Shutterstock

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