Semiconductors Are Leading To Another Tectonic Shift In Computing: Which Players Will Be Beneficiaries?

The world is about to see the fourth tectonic shift in technology, and Jefferies analyst Mark Lipacis sees several companies being able to capitalize off of it.

“Every 15 years the computing industry experiences a tectonic shift, which dramatically changes the computing model and competitive landscape. We believe we are at the start of a tectonic shift now, driven by low memory prices, improved parallel processors/software, and improved AI technologies like Neural Networks,” Lipacis said.

Winners And Losers

The Winners:

• Advanced Micro Devices, Inc. AMD: Buy.
• Analog Devices, Inc. ADI: Buy.
• Cavium Inc CAVM: Upgraded from Hold to Buy.
• Maxim Integrated Products Inc. MXIM: Buy.
• Microchip Technology Inc. MCHP: Buy.
• NVIDIA Corporation NVDA: Buy.
• Texas Instruments Incorporated TXN: Buy.
• Xilinx, Inc. XLNX: Upgraded from Hold to Buy.

The Biggest Loser:

• Intel Corporation INTC: Lowered from Hold to Underperform.

Nvidia Could Be The Biggest Beneficiary

Lipacis sees Nvidia in the strongest position to capitalize on this shift. “Nvidia was the first to recognize and successfully invest in a HW/SW platform (GPU/CUDA) targeted specifically at parallel processing applications, and our field checks suggest it is years ahead of its competition,” he said.

Since AMD, Xilinx and Cavium also have parallel processing platform, Lipacis sees them also being to benefit off this transition. Maxim Integrated, Texas Instruments, Analog Devices and Microchip Technology should benefit as more companies understand how to monetize the data generated by loT.

Intel Could Get Hit Hard

Since Intel has a huge amount of market share in the datacenter, “Intel has the most to lose as the industry shifts to a parallel processing/IoT model,” Lipacis said. This led him to lower his rating on Intel to Underperform.

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