Intel Vs NVIDIA: Which Stock Is The Better Buy?
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Intel (INTC) and NVIDIA (NVDA) both sell AI data center chips and say that demand exceeds their supply. For Intel to be the better buy, the company must turn that demand into profit while operating its own factories. Investors pay far less for Intel, pricing it at 5.1 times sales compared to 13.5 for NVIDIA. But with Intel’s PC sales falling, is its server growth enough to make up for them?
Intel Forecast A Smaller Quarter, NVIDIA A Bigger One
According to Intel’s own forecast, server growth will not make up for falling PC sales in the fourth quarter of 2026. Intel guided revenue to $15 billion to $16 billion, falling below the $16.5 billion it reported for the third quarter. Management expects data center sales to keep growing from the third quarter while PC chip sales fall by more than 20%. The forecast also includes lost revenue from an incident at the company’s Fab 28 plant. Management put that hit at roughly $300 million, almost all of it from server products.
Intel is not short of demand for its data center chips. Its data center revenue rose nearly 80% from a year earlier to $7.3 billion in the third quarter, and management said demand for those chips meaningfully exceeds supply.
NVIDIA’s latest forecast is a different kind of news, because almost all of NVIDIA’s sales come from data centers: $89 billion of the $96.2 billion it reported for its quarter ended July 26, 2026. For the following quarter, NVIDIA guided revenue to $108 billion, plus or minus 2%, and management expects supply to remain a bottleneck at least through the end of fiscal 2028. NVIDIA sells server CPUs too, including its new Vera CPU, and expects its CPU revenue to more than double in fiscal 2028.
Intel Is Still Spending Heavily On Chip Factories
Intel has not yet turned its factory spending into profit. Intel Foundry, the business that runs Intel’s chip plants, posted an operating loss of $1.9 billion in the third quarter, though the loss was smaller than in the second quarter. Management plans $20 billion of capital spending in 2026, expects more in 2027, and said Intel will probably not have positive free cash flow in 2027.
NVIDIA has far more cash coming in: $127 billion of free cash flow over its four quarters to July 26, against $3.77 billion for Intel over its four quarters to September 26. NVIDIA’s own exposure is to the customers it backs. It has invested nearly $50 billion in AI labs, and on its August 26 call, management said it expects labs it supports with its balance sheet to make up roughly a quarter of its business the following year.
NVIDIA And Intel Compared On Growth, Profit And Debt
NVIDIA is ahead on all three metrics. NVIDIA’s revenue grew 83.4% over its twelve months to July 26, while Intel’s revenue grew 12.1% over its twelve months to September 26. NVIDIA’s operating margin over those periods was 65.2%, against 10.1% for Intel. Meanwhile, Intel’s debt equals 16.4% of its market value, while NVIDIA’s debt sits under 1%.
Intel’s advantages are its lower price on sales and the direction of its operating margin. This margin has risen two years running, climbing from a loss in the twelve months to September 2024. Even so, Intel is cheap only next to NVIDIA. The S&P 500 trades at 3.2 times sales with an operating margin of 19.0%, meaning Intel’s buyers pay more than the broader market for a thinner margin.
Side by side, NVIDIA leads on growth, operating margin and debt, and Intel on price against sales and the rise in its margin. Intel has the demand for its data center chips, but its factory business is still losing money. Intel Foundry’s operating loss is the figure to watch when Intel is expected to report in January 2027. NVIDIA reports first, on November 17, for the quarter it guided to $108 billion.
Does This Mean You Should Act On INTC?
Betting on a single stock is always risky, whichever way you lean. The Trefis High Quality (HQ) Portfolio holds 30 quality companies in equal weight and has returned 105% since its September 2020 launch.
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