The Market Is Misguided On Nvidia’s Move To Enter The PC Market With An ARM-based CPU

In an unsurprising development, Reuters reported that Nvidia (NVDA) was entering the PC market using ARM CPU-based solutions as early as 2025.

While the news was expected by many observers in the industry for obvious reasons (explanation below), the interpretation of the news by the market has been befuddling. The market saw the news as a sign that Nvidia is moving into Intel (INTC) and Advanced Micro Devices (AMD) turf and sent those two stocks lower. The aura of invincibility which was once attributed to intel now seems to be passing on to Nvidia.

Market reaction apart, this is neither the first time nor will be the last time that investors and analysts got snowed by the rhetoric of ARM taking over x86. The reality, however, is likely the opposite of what the market reaction suggests. In other words, we are likely witnessing yet another economically wasteful effort to replace x86 with ARM. Contrary to popular ARM mythology, what we are seeing today is largely a response from Nvidia to…