NVIDIA Corp. (NVDA) Unmmoved by Intel’s (INTC) GPU Push After Q3 Earnings Beat

Nvidia Corp. (NASDAQ:NVDA) didn’t seem too concerned that Intel Corp. (NASDAQ:INTC) snagged one of the renowned names in the graphics chip market from Advanced Micro Devices Inc. (NASDAQ:AMD).

Intel said November 8 that it hired Raja Kudori to head its newly formed Core and Visual Computing Group, signaling the company’s plans to ramp up its offerings in the high-end GPU market. Kudori was formerly the chief architect of Radeon Technologies Group, which is AMD’s graphics business.

Shares of both Nvidia and AMD fell following the news. Nvidia CEO Jensen Huang called Kudori’s departure a “great loss” for AMD and showed that Intel now acknowledges how valuable the GPU market is. The executive, however, alluded that Nvidia still has a large lead in the market and that it would likely take years before both Intel and Kudori make an astonishing breakthrough.

“It’s just an enormous undertaking,” Huang said in the conference call discussing Nvidia’s third-quarter earnings. He added that at least three years will be needed to introduce a new design to the market.

Earlier in the week, Intel and AMD announced that they will work together to produce new chips capable of powering thin but high-performance laptops, to compete with Nvidia.

Pundits said the partnership will dent the market share of Nvidia and that Intel also practically neutralized AMD in the PC race. Jim Cramer called the move “gutsy”, noting that Intel and AMD have hated each other since their creation. Huang, however, was unmoved, and even questioned the need for such hybrid chips given that Nvidia already has such energy-efficient ones that can be installed in powerful laptops. Nvidia’s chips have “set a new design point” and “really raised the bar,” Huang noted.

Third Quarter Results

Nvidia rode the strength of its datacenter business as it posted both earnings and revenue that toppled estimates. Revenue from the datacenter unit, which covered sales of GPUs to Amazon Web Services and other cloud providers, came in at $501 million, representing a 20 percent increase over the previous quarter. Revenue from crypto-related products, however, plunged to $70 million from $150 million recorded in the prior three-month period. Nvidia’s GPUs have benefited from the cryptocurrency craze around the world, and it was recently reported that a major change in the algorithms of Ethereum may affect the company as miners will no longer require such expensive hardware.

Despite this, Huang remained optimistic about the prospects of the company’s CUDA GPUs in the cryptomarket as new virtual currencies are introduced. NVIDIA earned $1.33 per share in the quarter on $2.64 billion of revenue. Analysts, meanwhile, pegged the company to earn 94 cents per share on $2.36 billion of revenue.

Nvidia is trading 3.18 percent higher after hours at $211.85. The company’s stock is up 190 percent so far this year.

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