Caught Between GPU and CPU, Is AMD the Big Loser in Nvidia-Intel Alliance?

TradingKey - After Nvidia’s announcement of a $5 billion investment in Intel and a strategic chip development partnership, AMD (Advanced Micro Devices) saw its stock drop more than 5% in early Thursday trading, as investors worried that a powerful alliance between its top rivals — Nvidia in GPUs and Intel in CPUs — could undermine AMD’s growth momentum. 

However, AMD recovered most losses by the close, suggesting market concerns may have been overblown.

On Thursday, September 18, Nvidia revealed it will invest $5 billion to acquire Intel stock and jointly develop AI infrastructure and personal computing products with the struggling semiconductor giant. The deal sent Intel’s shares soaring 22.77%, marking its largest single-day gain since 1987.

Wall Street strategists widely praised the move as a game-changer for Intel’s turnaround. Wedbush called it a transformative step that positions Intel at the forefront of the AI revolution.

In contrast, AMD plunged more than 5.5% at the open, raising investor fears: Could the strategic alignment of its two biggest competitors leave AMD as the ultimate loser?

Since Lisa Su became CEO, AMD has undergone a dramatic transformation — exiting non-core businesses like mobile communications chips and focusing intensely on GPUs and CPUs. Today, it is the second-largest player in the GPU market and the market leader in server CPUs.

According to Jon Peddie Research data released in early September, in the Q2 2025 add-in board (AIB) GPU market, Nvidia holds a dominant 94% share, while AMD captures 6%.

Meanwhile, PassMark’s July report showed that AMD achieved a 50% share in the server CPU market — the first time ever surpassing Intel and ending Intel’s decades-long dominance in this segment.

Mizuho analyst Jordan Klein said the Nvidia-Intel partnership is clearly bad news for AMD. He noted that Nvidia could have chosen to partner with AMD — which has both PC CPU and gaming GPU operations — but political pressure from President Trump likely pushed it toward Intel instead.

Klein added that AMD faces pressure from Nvidia in GPUs, competition from Broadcom in custom chips — where AMD lacks presence — and now even greater risk from a combined Nvidia-Intel front threatening both its GPU and CPU platforms.

Limited Impact on AMD

Despite initial panic, many analysts argue that AMD can withstand the competitive challenge, a view partially validated by its strong intraday recovery.

J. Gold Associates acknowledged that a tie-up between two major rivals is not positive for AMD. It now faces not only a stronger Intel but also the risk of losing market share to emerging AI chip startups.

The collaboration could lead to tighter integration and optimization between CPU and GPU ecosystems, making it more attractive for enterprise clients already using Intel platforms to adopt Nvidia solutions.

However, the firm believes AMD still holds significant advantages in AI, especially given Nvidia’s ongoing supply constraints. This production gap gives AMD room to expand its footprint.

Zacks Investment Management maintains that AMD remains the value champion, offering solid performance at lower prices than Nvidia — making it a popular alternative to Nvidia’s premium-priced offerings.

Zacks also remains bullish on AMD’s long-term outlook, citing the broader expansion of AI infrastructure spending. As long as capital expenditures remain stable, there is ample opportunity for all players building AI systems.

Moreover, one key reason Nvidia turned to Intel is Intel’s relative weakness in CPUs — particularly its need for foundry capacity. But Intel’s severe delays in new factory construction mean it cannot support Nvidia’s needs in the near term, limiting the immediate threat to AMD.