Investors looking for exposure to the chip market would do well to avoid Intel (INTC -1.13%) and buy stock in NVIDIA (NVDA 16.40%) and Advanced Micro Devices (AMD 10.70%) 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.