Why NVIDIA Stock Gained Today

NVIDIA Corporation NVDA shares traded higher following a report suggesting the company will make Arm-based PC chips, which could challenge Intel INTC.

What To Know: According to a Reuters article, Nvidia is in the process of developing central processing units (CPUs) designed to support the Windows operating system from Microsoft Corporation MSFT. The CPUs will incorporate technology from Arm Holdings ARM, an initiative which coincides with Microsoft's plan to assist chip companies create Windows PCs using Arm-based processors.

Advanced Micro Devices, Inc. AMD intends to also pursue Arm-based chips for PCs, with both companies potentially able to sell them by 2025.

With Qualcomm already producing Arm-based chips for laptops since 2016, the three companies could very well disrupt the PC industry, specifically Intel's reign as leader. Intel faces threats not only from Nvidia, but also from Apple Inc. AAPL which also leverages Arm-based chips.

Furthemore, Microsoft has been promoting the use of exclusivity deals, such as the one with Qualcomm, in order to curb reliance on Intel.

Jay Goldberg, chief executive of D2D Advisory, elaborated on the company's strategy, stating, “Microsoft learned from the 90s that they don’t want to be dependent on Intel again, they don’t want to be dependent on a single vendor. If Arm really took off in PC (chips), they were never going to let Qualcomm be the sole supplier.”

Ostensibly, AI is also a factor in the Microsoft's effort to help chip companies utilize Arm-based technology, urging them to incorporate advanced AI features into the CPUs.

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NVDA, INTC Price Action: Shares of NVDA were up 0.13% at $430.30 while shares of INTC were up 0.15% at $33.91 in the after hours session at the time of publication, according to Benzinga Pro.

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