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Nvidia (NASDAQ: NVDA) dominates the artificial intelligence (AI) GPU market with a 90% share, showcasing impressive gross margins of around 70%. The AI market is projected to grow by over 30% annually through 2033, justifying Nvidia’s current price-to-sales ratio of 23 and price-to-earnings ratios of 45 and 33, despite its premium valuation.
In comparison, Intel (NASDAQ: INTC) holds a mere 1% market share in data center GPUs, struggling with lower profitability and stagnating growth. Intel’s shares trade at 1.6 times sales, presenting a stark contrast to Nvidia’s valuation. However, should Intel successfully pivot strategically, it poses potential upside for long-term investors willing to navigate its challenges.
Despite Nvidia’s edge in performance and ecosystem, Intel may find niches in the expanding AI market. Investors must weigh these factors carefully, considering long-term growth potential against Nvidia’s current market dominance.
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