The recent enthusiasm for Intel, a surge of some 135% in recent months, has struck me as a rather vulgar display. One might almost believe the market possessed a functioning memory. The company, buoyed by government largesse and the somewhat desperate affections of Nvidia and SoftBank, has enjoyed a temporary reprieve. But a closer inspection reveals the usual deficiencies, masked by optimistic accounting and the prevailing air of technological hysteria.
The fourth-quarter results, announced with the usual fanfare, were, predictably, disappointing. A mere 4% decline in revenue, they assure us, and earnings marginally improved. A triumph, no doubt, if one discounts the subsequent guidance, which sent the shares tumbling with the swiftness of a disgraced diplomat. Break-even earnings are projected for the current quarter, a stark contrast to the expectations of a modest profit. The market, it seems, prefers its illusions undisturbed.
Intel attributes this temporary misfortune to a supply shortage. A familiar refrain. One suspects a more fundamental inability to compete in the modern marketplace. The claim that revenue would have been ‘meaningfully higher’ had there been sufficient supply is the sort of bluster one expects from a cornered bureaucrat.
The stock, trading at an absurd 88 times trailing earnings, offered a particularly tempting target for a correction. The management’s optimistic pronouncements regarding AI chips, while undoubtedly sincere, were insufficient to counteract the prevailing sense of unease. It is a truth universally acknowledged that a company in possession of a high valuation must be in want of justification.
The discerning investor, however, should direct his attention elsewhere. To Nvidia, naturally. A company which, unlike its competitor, appears to possess a grasp of both technology and logistics. It currently controls an estimated 86% of the AI chip market, a position secured not merely by innovation, but by a ruthless efficiency in supply chain management.
Taiwan Semiconductor Manufacturing, it appears, allocates a full 70% of its advanced packaging capacity to Nvidia. A rather telling statistic. It suggests a level of control that borders on the monopolistic, but in the current climate, one can hardly object. After all, predictability is a rare and valuable commodity.
Nvidia has even displaced Apple as TSMC’s top customer. A symbolic victory, perhaps, but one that underscores the company’s dominance. The prospect of sustained growth is considerable. Bloomberg estimates that the AI accelerator market could generate $604 billion in revenue by 2033, with Nvidia poised to capture a substantial share.
The company’s data center GPU revenue could reach $423 billion by 2033, a figure that dwarfs its current earnings. AMD, meanwhile, is expected to occupy a distant second place, with a mere 10% share. Intel, unsurprisingly, does not feature in these projections. A clear indication that the game, as they say, is up.
That is why, at a forward earnings multiple of 24, Nvidia appears to be the more sensible investment. The additional potential in the automotive and gaming sectors further enhances its appeal. It is, in short, the ideal vehicle for capitalizing on the secular growth of the semiconductor market. One should always seek out the companies that not only innovate, but also understand the art of keeping things running smoothly. A lesson, alas, that Intel seems destined to ignore.
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2026-01-30 18:53