To The Moon

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You know who's really riding the AI wave like a boss? $NVIDIA Corp(NVDA)$! Training large language models and running them? It's all about brute force computing power. Nvidia's datacenter GPUs are the gold standard in AI, and everyone from cloud giants to AI startups are lining up to get 'em.

Thanks to huge demand for AI-centric GPUs, Nvidia's revenue doubled in the last quarter, and earnings per share jumped nearly six times! Their market cap? Over 2 trillion dollars! One of the most valuable companies on the planet!

Why isn't Nvidia the best AI bet?

While Nvidia is currently riding high, competition is bound to nibble away at their AI market share. $Advanced Micro Devices(AMD)$ is giving them a run for their money with their high-powered AI chips, and tech and cloud giants are increasingly designing custom AI chips optimized for their datacenters.

Giant companies are still buying Nvidia GPUs in bulk, but the options for training and running AI models are multiplying. Over time, Nvidia's absolute dominance in the AI chip market is almost certainly going to weaken.

AI chips manufacture and package

Designing AI chips? Any big tech company with a huge budget can do it. But manufacturing them? That's another story. Right now, there's only one viable option for making AI chips with the latest technology: $Taiwan Semiconductor Manufacturing(TSM)$ . They're the leaders in the foundry market, way ahead of the competition technologically.

But that's going to change by 2025, when $Intel(INTC)$ officially enters the foundry market. This chip giant is on a mission to roll out five new process nodes in four years, with the last one expected to technologically outpace TSMC. Intel's 18A process will hit mass production next year, and they've already snagged some major customers.

So far, Intel's foundry business has booked $15 billion in orders, covering not just the 18A but other nodes and advanced packaging services too. Rumor has it that Nvidia's planning to team up with Intel for some advanced packaging needs, but that's still unconfirmed. But the deal with $Microsoft(MSFT)$ to use Intel's 18A to produce some undisclosed future chips? That's a done deal, and a huge win for Intel's fledgling foundry biz.

Over $230 billion opportunity!

By 2032, the foundry market is expected to more than double to over $230 billion. Intel's share? It's zero now, but if they can successfully regain their manufacturing edge and ramp up production on leading nodes, their share will skyrocket in the next decade.

Today, Intel's valuation is under $200 billion, and its stock is still way down from its peak during the pandemic. Intel's foundry business has by far the greatest long-term growth potential.

And here's the kicker: no matter how the semiconductor and AI industries shake out, Intel's foundry biz will thrive.