Please ensure Javascript is enabled for purposes of website accessibility

Raymond James Analyst Says Forget Intel, Buy NVIDIA and AMD Instead

By Rich Duprey - Updated Apr 16, 2021 at 1:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are better opportunities ahead for Intel's competitors.

Investors looking for exposure to the chip market would do well to avoid Intel (INTC 0.82%) and buy stock in NVIDIA (NVDA 1.11%) and Advanced Micro Devices (AMD 0.20%) instead, according to one analyst.

Raymond James (NYSE: RJF) analyst Chris Caso says that despite new CEO Pat Gelsinger taking the reins of the company this past February, there's too much uncertainty surrounding Intel's ability to resolve manufacturing issues and regain market share that was lost. In the note to investors on Thursday, Caso rated Intel as underperform, the equivalent of a sell rating.

Computer chip with car sensor image

Image source: Getty Images.

A better bet would be NVIDIA, Caso said, because it has both short- and long-term growth catalysts. 

The reopening economy and the return to work will propel NVIDIA's enterprise business, and the launch of its A10 GPU should bolster the graphic-chip producer's data center business in the latter half of the year.

Longer term, Caso said, NVIDIA has its work in artificial intelligence to look forward to as a way to drive revenue gains, as it established itself in the space and deserves "a permanent seat at the table." NVIDIA isn't resting on its laurels, but is expanding the total addressable market.

Caso also initiated coverage on AMD with an outperform rating and a $100 price target, 20% above where the chipmaker closed trading on Thursday.

The analyst says AMD has a solid technical competitive edge over Intel that has been ignored by the market lately on the belief that Intel's manufacturing problems will be resolved. AMD stock is down 16% from recent highs as a result, but Caso doesn't see Intel ever regaining superiority over its tech rival in the transistor market.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NVIDIA Corporation Stock Quote
NVIDIA Corporation
$151.30 (1.11%) $1.66
Intel Corporation Stock Quote
Intel Corporation
$36.99 (0.82%) $0.30
Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
$75.35 (0.20%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.