Alliance Partners

Tuesday, May 28, 2024

Nvidia and Intel?

From my friend Kanwal Rekhi



Nvidia shares  closed at $1068 on Friday, giving it a Market Cap of $2.6 Trillion. Intel closed at $30.7, giving it a Market Cap of $130 Billion, just about 5% of Nvidia.

Market is clearly signalling that it loves Nvidia and its management and hates Intel and its management. If I were Jensen Huang, I would be thinking of acquiring Intel. Nvidia could pay 100% premium over market and still not dilute more that 10%.

The fit is impeccable. Intel has spent heavily to build latest fabs; Nvidia outsources its manufacturing. Intel is still profitable and will not be too dilutive.

US government would love it as the AI chips will get manufactured in US rather than shaky Taiwan. It probably will waive all antitrust considerations.

In any case, my mind wanders and I can't help it!

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