Nvidia Intel deal implications, according to Wall Street analysts

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Wall Street analysts think through the Nvidia-Intel deal

TL;DR: Huge for Intel, helpful for Nvidia, and potentially bad for AMD.

9/18/25 12:23PM

Intel shares were on a tear Thursday after Nvidia announced a $5 billion equity investment in the iconic, but struggling, American chipmaker.

Such a price shock suggests a major rethink of the outlook for Intel. But the nature of that rethink is worth digging into.

Wall Street analysts are already out with some notes giving thoughts on the implications of the deal. Here are a few, with some Sherwood News-provided translations, where appropriate, for those less than fluent in semiconductor-speak.

Evercore ISI

“We view the announcement as a positive for both companies: 1) for NVDA because custom x86 DC CPUs should translate to improved performance for its x86-CPU-based AI infrastructure, and it is extending its NVLink ecosystem into INTC products, and 2) for INTC, as the collaboration could help stem share loss to AMD in both DC and PC CPUs. Also, we view the NVDA investment in INTC as an important commitment and potentially initial step towards deeper collaboration.”

Translation: In AI data centers, Nvidia GPUs — the processing units the company is best known for — are often used in combination with Intel’s CPU chips.

So if Nvidia can collaborate on making custom Intel chips using Intel’s proprietary x86 architecture, it might improve the overall performance of Nvidia’s AI systems.

Also, the collaboration could mean the superfast connections Nvidia has developed to link up its GPUs (called NVLink) might start to be used more with Intel CPUs, which hasn’t been typical.

For Intel, the deal could bolster its sales of CPUs both for data centers as well as personal computers, where its dominance has been eaten way by Advanced Micro Devices.

Mizuho

“Near term, this positions INTC better as it develops custom Server CPUs and markets with NVDA, and gives NVDA a new market to increase NVLink and RTX GPU penetration, while a challenge for AMD. We believe the INTC-NVDA partnership could put AMD at a competitive disadvantage.”

Bernstein Research

“This looks like a product deal, not a foundry deal (at least for now). From the press release on the PC side Intel will ‘build and offer to the market x86 system-on-chips that integrate NVIDIA RTX GPU chiplets,’ and on the datacenter side ‘Intel will build NVIDIAcustom x86 CPUs that NVIDIA will integrate into its AI infrastructure platforms and offer to the market.’

“Hence while there would seem to likely be some packaging business in there for Intel there does not seem to be any agreements or commitments on the wafer foundry side (yet).

“But frankly Intel can use the help on the product business just as much given share position in key markets has been bleeding.”

Translation: The deal seems primarily focused on development of new semiconductor products that should improve Intel’s access to the fast-growing AI market, rather than on making Nvidia a customer for Intel’s troubled contract manufacturing business, or “foundry,” where it produces chips for others. (The troubled foundry division has been a long-standing headache for the company.)

Wedbush Securities

“This is a game changer deal for Intel as it now brings them front and center into the AI game. Along with the recent US Government investment for 10% this has been a golden few weeks for Intel after years of pain and frustration for investors... This partnership focuses on leveraging NVDA’s AI and accelerated computing stack with Intel’s CPUs and vast x86 ecosystems to lay the foundation for the next wave of computing with AI.”

Tasha Matsumoto

12/5/25

Stocks eke out a gain as inflation remains mild

The S&P 500, Nasdaq 100, and Russell 2000 all posted weekly gains.

CHICAGO, ILLINOIS - DECEMBER 23: Benny the Bull, the Chicago Bulls mascot, dresses as Santa Claus in the game against the Milwaukee Bucks during the second half at the United Center on December 23, 2024 in Chicago, Illinois

Luke Kawa12/5/25

Microsoft is in talks to shift its custom chip business to Broadcom from Marvell, The Information reports

The Information’s profile of custom chip specialist Broadcom includes this tidbit:

“And now Microsoft is also in talks to design future chips with Broadcom, which would involve Microsoft switching its business from Marvell, another maker of custom chips, according to one person involved in the discussions.”

Shares of Marvell Technology briefly dipped into the red after this report hit the wires, but then pared that drop to trade modestly higher. The company codesigns the Maia line of ASICs for Microsoft that are custom-built for Azure. Microsoft is its second-biggest hyperscaler client, behind Amazon.

Marvell tumbled on a ho-hum earnings report earlier this week before going on to surge after CEO Matt Murphy offered a $10 billion revenue target for its upcoming fiscal year, which was above analysts’ expectations.

Perhaps this is a bit of Information fatigue, given how Microsoft was quick to deny a report from the outlet earlier this week about how the tech giant lowered its sales targets for AI products.

Luke Kawa12/5/25

Memory stocks soar as AI supporting cast repairs damage from steep November declines

There’s not much rhyme or reason to it, but memory stocks are ending the week with a stellar showing.

Shares of high-bandwidth memory specialist Micron, hard disk drive sellers Seagate Technology Holdings and Western Digital, and flash memory company Sandisk are all rising today.

Three of these stocks dropped about 20% in November as credit risk seeping into AI and a downturn in speculative momentum stocks weighed on the theme, with Sandisk faring the worst.

Micron, Western Digital, and Seagate have all since rebounded strongly and are about 5% or less from reclaiming all-time highs, while Sandisk has made up the least ground.

While GPUs (and, more recently, TPUs) get most of the headlines, data centers also need a boatload of memory chips that store information and feed it to those processors.

Nia Warfield12/5/25

Ulta soars as Q3 beat sparks flood of price target hikes

Ulta’s latest makeover is happening on Wall Street. Shares leapt Friday morning as analysts hiked their price targets after the beauty retailer topped Q3 estimates and raised its full-year outlook after the bell Thursday.

Earnings came in at $5.14 per share, handily beating analyst expectations of $4.64. Revenue also topped estimates at $2.86 billion, compared with the $2.72 billion expected. Ulta has benefited from resilient beauty spending, even as consumers pull back elsewhere and hunt more aggressively for discounts.

Ulta now expects full-year net sales of about $12.3 billion, up from a prior forecast of $12.0 billion to $12.1 billion. The retailer also lifted its earnings outlook to $25.20 to $25.50 per share, up from $23.85 to $24.30 previously. This marks Ulta’s second straight quarter of hiking its sales and profit forecast. Analysts are taking note:

Goldman Sachs maintained its “buy” rating and raised its price target to $642 from $584.
DA Davidson maintained its “buy” rating and raised its price target to $650 from $625.
JPMorgan maintained its “outperform” rating and raised its price target to $647 from $606.
Baird maintained its “outperform” rating and hiked its price target to $670 from $600.
Telsey Advisory maintained its “outperform” rating and raised its price target to $640 from $610.
Piper Sandler maintained its “outperform” rating and raised its price target to $615 from $590.
Canaccord Genuity maintained its “neutral” rating and raised its price target to $674 from $654.

Max Knoblauch12/5/25

Southwest cuts its earnings outlook on lost revenue due to government shutdown

Another big four airline has put a price tag on the 43-day government shutdown.

Southwest Airlines on Friday said lower revenue due to a temporary decline in demand during the shutdown, together with higher fuel costs, will ding its annual earnings before interest and taxes by between $100 million and $300 million. The carrier lowered its full-year EBIT outlook to $500 million, down from a prior range of $600 million to $800 million.

According to Southwest’s filing, bookings have returned to previous expectations following the end of the shutdown. Its shares dipped down about 1% in premarket trading.

The carrier joins Delta Air Lines in assigning a cost to the government closure. Earlier this week, Delta said the shutdown would cost it $200 million in the fourth quarter.