On Monday,  Intel Corporation (NASDAQ:INTC) raised eyebrows across the tech world by unveiling its new 8th Gen Intel Core desktop processor family. Perhaps most notably, the central processing unit (CPU) giant lauded its new Intel Core i7 desktop chip as the company's "best gaming processor ever," delivering up to a 25% improvement in frame rates over its predecessor.

Naturally, shares of AMD (NASDAQ:AMD) and NVIDIA (NASDAQ:NVDA) plunged 5.2% and 4.5%, respectively, as investors worried over the new competitive threat posed by Intel's hefty new gaming chip.

But there's just one problem with that train of thought, particularly for NVIDIA investors: Intel's new high-end gaming CPU poses no threat to the graphics processing units (GPUs) sold by either company.

Intel's new 8th Gen i7 Core processor


That said, Intel's new 8th Gen Core i7 will compete directly with AMD's latest gaming-centric CPUs. So while it might be an overreaction to a product that has yet to prove itself, it's an understandable response from skittish AMD investors.

But it's hard to see what all the fuss is about for NVIDIA, which focuses solely on GPU technology.

Complementary products

For perspective, note that in a desktop computer, the CPU is often referred to as the machine's "brain," and has fewer cores optimized to handle most processing tasks required by the machine. Meanwhile, GPUs are designed with thousands of cores built to more efficiently handle many tasks at once, making them ideally suited for the computationally intense tasks like handling graphics for gaming. In short, CPUs and discrete GPUs are complementary technologies, and both are required for any desktop machine to deliver a satisfactory gaming experience.

Ironically given NVIDIA's share price decline today, if you scroll down to the bottom of Intel's own 8th Gen Core press release you'll see all but one of its test configuration machines had an NVIDIA GTX 1080Ti GPU installed. The lone holdout was one built to provide a benchmark for a "5-year-old" system, and featured an older integrated Intel HD Graphics 2500 chip.

Ripe for a pullback?

Though Intel's 8th Gen Core i7 isn't a threat to NVIDIA, I can understand why investors might feel nervous about the prospect of a new competitor stemming the growth of NVIDIA's core business. Last quarter, for example, gaming market revenue increased a stellar 52% year over year to $1.186 billion, comprising more than 53% of NVIDIA's total sales. That strength was driven by strong adoption of -- you guessed it -- NVIDIA's GeForce GTX gaming platforms.

At the same time, the market has consistently underestimated NVIDIA's potential since its growth began to accelerate late last year. And as more industries continue to embrace the power of GPU computing, NVIDIA shares have climbed more than 160% over the past year alone (even after Monday's pullback). So, in retrospect, perhaps it should be unsurprising that some investors were quick to take their profits off the table at the first semblance of negative news. Personally, however, I'm content holding my shares and watching NVIDIA continue to extend its market leadership.

Steve Symington owns shares of Nvidia. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.