Intel is Joining the GPU Race—Here’s Why It Can Win Big

Intel (NASDAQ:INTC | INTC Price Prediction) finally had its moment to shine, thanks in part to the huge votes of confidence from the government as well as the GPU chip king Nvidia (NASDAQ:NVDA). The impressive more-than-100% surge rewarded investors who got the timing right with the hard-hit chipmaker that had a painful fall from grace. More recently, shares of the CPU giant quickly fell into a bear market before bouncing back modestly.

Though shares are still up quite a bit (around 22%) on the year, the shockwaves working through tech and the Nasdaq 100 could certainly wipe out the year’s gains and then some. With Advanced Micro Devices (NASDAQ:AMD) limping after reporting some “strong” quarterly earnings results, it’s hard not to be just a bit more concerned with the red-hot semi plays as the trajectory shows signs of reversing.

Of course, hardware might not yet be in for the same kind of beatdown as software. Still, investors should be ready for anything as volatility takes center stage. When it comes to a name like Intel, volatility is more an expectation than anything out of the ordinary. And given resilience through the bumps has been rewarded in the past year, I’d argue there’s plenty of incentive to stay the course, even as some of Nvidia’s rivals stumble.

Getting back into the GPU world could prove lucrative

With Intel joining the GPU race with the hopes of catching Advanced Micro Devices or even the great Nvidia, the fallen Intel certainly feels like the ultimate underdog to bet on, especially now that it’s got some newfound momentum, as well as the investment dollars of the federal government.

Perhaps getting into the GPU race is enough reason to buy Intel stock on the latest slump, as we learn more about the firm’s comeback plans as it looks to double down on the AI data center boom.

With industry veteran and top-tier GPU architect Eric Demers joining the team and a strategic plan now in place, I certainly wouldn’t bet against Intel stock, even if closing ground in the GPU market seems like an intense uphill battle with a highly unlikely chance that the underdog will race ahead. Sure, count Intel out in the GPU race now, if you will, but the company has the talent and the leadership to pull off something special.

With the company also reportedly working with Softbank on AI memory (called ZAM), perhaps the multi-year shortage in RAM might not be as much of a setback as some of its rivals. In any case, there’s a world of growth potential to be had as Intel looks to win business in GPUs. And while there are also major risks, it feels like Intel now has enough momentum in its back to take meaningful share away from its rivals.

Will Intel’s GPU push justify the heftier multiple?

Shares of Intel used to be dirt-cheap, but after more than doubling in a year, it’s tough to pinpoint the right price. When you factor in the memory collab with Softbank and the GPU push into the equation, I think there’s a strong case that the stock remains undervalued right here.

As we head into the second half of 2026, we’ll see how Intel’s next-generation chips, named Falcon Shores and Crescent Island (Intel definitely has the coolest chip names, bar none!), fare. Time will tell how disruptive Intel’s new offerings will be, but 2.12 times price-to-book (P/B) and 4.2 times price-to-sales (P/S) certainly doesn’t seem like too high a price to pay for a firm that’s getting its groove back. Even if Intel finishes the GPU race with a bronze medal, there’s still a lot to gain at this phase in the AI boom.

As such, perhaps the price of admission doesn’t yet bake in Intel as a serious contender in the GPU race. Of course, Nvidia and Advanced Micro Devices are going to be hard to beat, but Intel might be able to gain share if it can flex its value muscles.