Market Overview

What A Possible AMD-Tesla Deal Means For Nvidia

Share:
What A Possible AMD-Tesla Deal Means For Nvidia
Related NVDA
Benzinga's Bulls & Bears Of The Week: Coca-Cola, Ford, JC Penney, Spotify And More
Cowen Models 30% Upside In Nvidia
Suntrust Banks Inc Buys iShares MSCI Japan Index Fund, iShares MSCI EAFE Small-Cap ETF, ... (GuruFocus)
Related AMD
AMD, Halliburton, Gold Miners, Brazil ETF: 'Fast Money' Picks For May 24
Intel, Google And Microsoft Discover New Low-Risk Chip Flaws
Synopsys: Is There More Juice Left? (GuruFocus)

Tesla Inc (NASDAQ: TSLA) is reportedly working with chipmaker Advanced Micro Devices, Inc. (NASDAQ: AMD) to develop chips for driverless vehicles that incorporate artificial intelligence technology. While the partnership is certainly good news for AMD investors, shares of NVIDIA Corporation (NASDAQ: NVDA), which also has a partnership with Tesla, were seen down more than 2 percent Thursday morning.

In a new note to clients, RBC analyst Mitch Steves said Nvidia investors have nothing to be worried about. According to Steves, there is plenty of Tesla business for both Nvidia and AMD, and the AMD news is just noise for Nvidia (see his track record here).

Steves says Nvidia investors should be prepared for AMD to steal a certain amount of market share in the auto and low-end data center markets, but Nvidia will remain the gold standard. Steves pointed out that Nvidia also has auto partnerships in place with a range of other companies, including Uber and Toyota Motor Corp (ADR) (NYSE: TM).

“Overall, we think Nvidia remains as the primary workhorse/engine while AMD chips are used for specific applications to avoid giving Nvidia 100% of the AI content in self-driving vehicles,” Steves wrote. In fact, Steves says any news of increased investments in AI technology is good news for Nvidia in the long term.

In the near term, however, Steves says Nvidia traders should be prepared for some market volatility.

The AMD/Tesla news came just one day after Bernstein analyst Max Warburton said Tesla’s self-driving technology is “exaggerated” and that there is very little difference between the autonomous driving capabilities of Tesla and German automakers, such as BMW (OTC: BMWYY) and Volkswagen AG (ADR) (OTC: VLKAY) (see his track record here).

RBC maintains an Outperform rating on Nvidia and a Neutral rating on Tesla.

Related Link: Analyst: Tesla's Self-Driving Technology Is 'Exaggerated'

Latest Ratings for NVDA

DateFirmActionFromTo
May 2018Cowen & Co.Initiates Coverage OnOutperform
May 2018UBSMaintainsNeutralNeutral
May 2018B. Riley FBRMaintainsBuyBuy

View More Analyst Ratings for NVDA
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Contracts Reiteration Travel Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (AMD + BMWYY)

View Comments and Join the Discussion!