Sell Nvidia, Buy Intel Stock For Big Upside?
Exactly a year ago, as Nvidia’s (NASDAQ:NVDA) AI-fueled rocket kept climbing, we made the case for trimming positions in the GPU giant and pivoting to undervalued Intel (NASDAQ:INTC)—a contrarian bet on cycles turning in semiconductors.
Fast-forward to today: Nvidia is up about 28% since December 6, 2024, while Intel has surged 95%. That swap would have delivered solid alpha in a market still obsessed with AI hype.
The real question? With both stocks in the green, does the trade hold water for 2026 and beyond? Let’s break it down.
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Nvidia’s Remains Impressive, But Cracks Are Showing
Nvidia is still a magnificent company, but at a $4.4 trillion market cap, it is priced for perfection in a world that is becoming messy. The “easy” growth phase (Triple-digit expansions) is over; we are now entering the “grind” phase.
The Shift from Training to Inference
- Nvidia built its empire on training massive models (ChatGPT, Gemini), a task where its GPUs are unrivaled. This trend largely continued over 2025 as well.
- But the future could be all about inference (running those models). Inference is cost-sensitive, not just performance-sensitive. You don’t need a Ferrari to make a grocery run, and you don’t need an H200 to run a simple customer service chatbot.
- Inference workloads are moving to specialized, cheaper silicon. This margin erosion might be inevitable as AI matures from model building to “utility.”
Google’s TPU Gains
While Wall Street watches Nvidia, Silicon Valley is quietly deploying Google’s Tensor Processing Units such as the Trillium
- Rising adoption of TPUs: Google has used these chips to train and run its Gemini models, and it also sells them to outside clients such as Anthropic. Anthropic has said it plans to spend tens of billions of dollars to acquire as many as one million Google TPUs, which would provide roughly 1 gigawatt of compute for its next wave of AI research.
- Meta Validation: There have been reports that Facebook parent Meta was in talks to buy TPUs for its AI models.
- Recent reports suggest Trillium offers 30-50% better price-performance for inference compared to Nvidia’s flagship GPUs.
- Challenges To CUDA: Nvidia’s CUDA software moat is being challenged by PyTorch 2.0 and OpenAI’s Triton, which could help to eventually make switching hardware easier.
Hyperscaler Capex Fatigue
- Shareholder pressure incoming: Amazon, Microsoft, and Meta have spent hundreds of billions on AI hardware capex. They will inevitably face shareholder pressure to show returns.
- Why pay Nvidia so much: Nvidia’s hardware is the single largest line item in this capital outlay. With top-end GPUs commanding upward of $30,000 a pop and Nvidia enjoying 50%+ net margins, the chipmaker is effectively eating the hyperscalers’ profits. To juice their own margins, Big Tech has no choice but to aggressively cut these hardware costs via custom silicon or optimization.
Intel’s Geopolitical Edge
Intel’s Tech: Closing the Gap, Not necessarily “Winning” (Yet)
Let’s be realistic about Intel foundry’s much vaulted 18A node. It is unlikely to beat TSMC’s N2 on day one in terms of yield or absolute performance. However, it doesn’t truly need to.
- While Intel has struggled with execution, its bet on Backside Power Delivery (PowerVia) is pretty innovative. This architecture solves critical thermal issues in dense chips and makes 18A highly attractive for specific high-performance workloads.
- Intel doesn’t need to steal the crown to succeed for shareholders. It simply needs to prove that 18A is a viable, stable alternative. If they can offer performance within 10-15% of TSMC, the geopolitical premiums take care of the rest.
The Geopolitics
As chip supply becomes inseparable from national security, Intel has emerged as one of the few Western manufacturers capable of anchoring a resilient, non-TSMC supply chain. There are several tailwinds here.
- Tariffs & Policy: New tariffs on imported chips could eventually narrow the cost gap between Taiwanese and U.S. wafers, boosting Intel and aligning with Washington’s push for localization.
- Strategic Infrastructure: The investment outlay in Intel’s Ohio and Arizona megafabs stands at over $50 billion. Government agencies such as the Department of Defense and Department of Energy could be structurally motivated to keep these plants running, making Intel part of America’s strategic infrastructure.
- Hedging Taiwan Risk: The world’s most advanced chips come from a single island (Taiwan). Global tech companies are forced to seek diversification. Intel is the only Western firm with the fabs, IP, and scale to provide a second supply chain outside Taiwan.
- Apple’s Exploratory Work: Apple is reportedly mulling the use of Intel’s foundry for some of its logic chip production. The move could help it establish a U.S. foothold for geopolitical resilience
The Verdict: Stick with the Switch
This is the strongest part of the case.
Nvidia ($4.4 Trillion market cap): At over 20x revenue, its priced for a world where nothing goes wrong.
Intel ($200 Billion) At 4x forward sales, its priced for a world where nothing goes right.
Sure Intel stock has rallied a fair bit. But even at these levels, the bad news (legacy foundry losses, market share bleed) is largely baked in. The stock acts as a coiled spring; any positive news on 18A yields or a confirmed Tier-1 customer signing creates disproportionate upside. Markets love a sure thing, but semiconductors are cyclical—Nvidia’s front-loaded AI windfall may fade as inference rises and rivals chip away, while Intel’s undervalued assets (foundry tech, U.S. footprint) prime it for a re-rating. The trade isn’t just holding; it’s accelerating.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read INTC Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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