Nvidia Is The Winner In Intel Partnership: Analyst Says Deal Widens 'Customer Base'

JPMorgan analyst Harlan Sur views the recently announced partnership between NVIDIA and Intel, which includes co-developed products and a $5 billion NVIDIA stock purchase, as disproportionately benefiting NVIDIA. Sur highlights NVIDIA's expanded market opportunity in AI infrastructure and new revenue streams, while noting only marginal gains for Intel and the absence of a commitment to Intel Foundry, with product launches projected for 2027.

Analysis

A strategic partnership between NVIDIA and Intel, involving co-developed products and a $5 billion stock purchase by NVIDIA, is viewed by JPMorgan analyst Harlan Sur as disproportionately benefiting NVIDIA. Despite the collaboration being positioned to improve Intel's competitive stance against AMD, the analyst maintains an Overweight rating on NVIDIA ($215 target) while holding an Underweight on Intel ($21 target). The core of this thesis is that NVIDIA gains access to entirely new revenue streams, specifically the iGPU market and a broader opportunity in rack-scale AI systems for customers who prefer x86 compute. Conversely, the benefit to Intel is seen as 'only marginally positive' for its Client PC division. Critically, the agreement lacks a firm commitment for the co-developed products to use Intel Foundry Services; both companies publicly lauded TSMC as a 'world-class foundry,' raising questions about the extent to which Intel's own manufacturing will be utilized. With new products not expected until an estimated 2027 launch, the material financial impact remains a long-term prospect.

Key Decisions for Investors

• Investors may view this partnership as a long-term positive for NVIDIA, as it reinforces the company's strategic expansion into new AI market segments and creates incremental revenue opportunities beyond its current offerings.
• Caution is warranted for Intel positions; the lack of a commitment to its Foundry Services in this key partnership is a significant risk, suggesting the deal may not be the transformative catalyst needed for its manufacturing turnaround.
• Portfolio managers should recognize the extended 2027 timeline for product launches, factor in the near-term cash flow impact on NVIDIA from the $5 billion stock purchase, and monitor future disclosures for any firm commitments on foundry utilization which would be a key indicator for Intel's strategic progress.