Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA) are battling it out in the chips space, but which one comes on top as the best stock to invest in at the current market sentiments? CNBC contributor, Brian Kelly, thinks Intel comes on top because of its attractive risk reward ratio. A secular shift from gaming consoles to PC’s according to Dan Nathan makes NVIDIA a worthy investment when compared to Intel.
There has already been talk that Intel Corporation (NASDAQ:INTC) is looking to buy rival chip maker Altera Corporation (NASDAQ:ALTR) which Mr. Kelly believes could offer the company further room for growth, sure to have an impact on the stock.
“[..] With Intel Corporation (NASDAQ:INTC) there is a lot they can do as we saw with this potential deal stock can go higher if they are buying this growth so at $31 I know at around $29 to $30 that is my stop up point. For me any stock that I can get a $1 risk reward and say goes up at least 10% that’s a 3 to 1 risk reward, I am happy with that,” said Mr. Kelly.
Intel Corporation (NASDAQ:INTC)’s valuation remains attractive to Karen Finerman at the back of an underleveraged balance sheet that she believes the company could use for a potential merger. Data center business also seems to be doing well for the company, which the analyst believes could help offset weakness in the PC business.
Nathan is remaining firm on NVIDIA Corporation (NASDAQ:NVDA) reiterating it would be better to own a potential acquisition target than an acquirer as this is always sure to provide good returns in the short term. The fact that the PC business has been showing signs of picking up in the market in the recent past also Makes NVIDIA an exciting investment as it is a key player in the manufacture of graphic chips.
NVIDIA Corporation (NASDAQ:NVDA) also trades below market multiple making it an interesting pick when compared to Intel which is a bit expensive according to Nathan. NVIDIA is a cheap stock with growth potential and a strong balance sheet that the analyst thinks could push the stock to highs of $24. Guy Adami also shares the same sentiments affirming that NVIDIA remains the better of the two.
“I think Intel to me they are trying to buy growth. [..] NVIDIA graphic chips dominate the space; I think they have a lot of runway in terms of where they can go with it. 16.5 times forward earnings it is not a lot it doesn’t seem that expensive to me […],” said Mr. Adami.
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