TLDR
- AMD stock dropped 5% after Nvidia announced strategic partnership with Intel
- Intel will manufacture custom x86 CPUs for Nvidia’s AI infrastructure platforms
- Nvidia investing $5 billion in Intel stock at $23.28 per share
- Competition intensifies as AMD faces pressure from increased Huawei competition
- Analysts express concerns about AMD being squeezed between stronger rivals
Advanced Micro Devices faces mounting pressure from multiple directions as competitors join forces against the chipmaker. The stock fell 5% Thursday morning following news of a strategic partnership between Nvidia and Intel.
The collaboration between AMD’s two primary rivals creates new competitive challenges. Intel shares surged 30% on the announcement while AMD investors showed clear concern about the implications.
Under the partnership agreement, Intel will manufacture custom x86 CPUs specifically for Nvidia’s AI infrastructure platforms. The deal combines Nvidia’s artificial intelligence expertise with Intel’s central processing unit technologies.
Strategic Alliance Details
The partnership extends beyond manufacturing arrangements. Nvidia announced a $5 billion investment in Intel common stock at $23.28 per share, strengthening ties between the technology companies.
For personal computing markets, Intel plans to create x86 system-on-chips that integrate Nvidia RTX GPU chiplets. These products will directly compete with AMD’s offerings in both data center and consumer segments.
The collaboration uses Nvidia’s NVLink technology to connect the two companies’ architectures. This technical integration creates a unified platform that could appeal to enterprise customers.
Mizuho TMT Sector Specialist Jordan Klein expressed concern about AMD’s position. “THIS IS BAD FOR AMD and will add pressure to ARM,” Klein wrote in a research note.
Klein noted that Nvidia could have partnered with AMD instead. “No way to sugar coat or look past that NVDA could have gone with AMD who has CPU and gaming for PCs,” he stated.
Competition on Multiple Fronts
The analyst highlighted AMD’s challenging competitive landscape. The company faces intense pressure from Nvidia in graphics processing units while also dealing with increased competition from Huawei.
Broadcom dominates custom silicon markets where AMD lacks presence. The new Intel-Nvidia partnership adds another layer of competitive pressure to AMD’s CPU and GPU product platforms.
AMD has been working to strengthen its position in AI chip markets. The company recently launched its Redstone AI technology, which can operate on Nvidia platforms.
However, AMD lacks dedicated AI cores compared to Nvidia’s offerings. This technical gap continues to challenge the company’s ability to compete effectively in artificial intelligence applications.
The market remains cautious about AMD’s AI prospects. Investors are watching for the company’s Instinct MI450 chip, scheduled for release in 2026, which aims to compete directly with Nvidia’s market-leading products.
AMD has established itself as a credible competitor to both Intel in CPUs and Nvidia in GPUs. The company has gained market share in recent years across both product categories.
The partnership announcement comes as competition in AI computing infrastructure reaches new levels. Companies are racing to develop next-generation products for the rapidly growing artificial intelligence market.
Klein warned about the broader implications for AMD. “To me this sort of pressures and squeezes AMD overall a lot more,” the analyst stated.
Advanced Micro Devices currently trades with a market capitalization of $258.3 billion and year-to-date price performance of 31.94%. The stock maintains an average trading volume of 55.9 million shares and shows a strong buy technical sentiment signal despite recent declines.
