Analysts revamp Nvidia stock outlook on its investment in Intel

Core Insights - Nvidia has been reliant on ARM for CPU cores in its superchips and has plans for new chips, including a laptop chip named N1 based on the GB10 superchip [1] - Nvidia reported a 59% year-over-year increase in net income for Q2 of fiscal 2026, amounting to $26.4 billion [2][6] - Nvidia's CEO emphasized the significance of NVLink rack-scale computing in enhancing AI model performance, positioning Blackwell as a central platform in the AI race [3] Financial Performance - Nvidia's revenue grew by 56% year-over-year to $46.7 billion, with a gross margin of 72.4%, down from 75.1% in Q2 FY 2025 [6] - The company expects Q3 revenue to be around $54.0 billion, with a gross margin forecast of 73.3% [6] Strategic Developments - Nvidia plans to invest $5 billion in Intel's common stock to develop custom data center and PC products [3] - The integration of custom Intel x86 server CPUs into Nvidia's architecture will enhance its capabilities, previously limited to custom ARM CPUs [4] - Intel will create x86 system-on-chips that incorporate Nvidia RTX GPU chiplets for the PC market, leveraging both companies' strengths [5] Market Outlook - Analysts anticipate improved access for Nvidia to enterprise AI deployments following its collaboration with Intel, although product timelines remain uncertain [7]