Americore Resources (TSXV: AMCO)
Drilling Value in the Silver State
Nvidia, which has delivered a cumulative gain of approximately 900% over the past five years, unexpectedly lost momentum in the first half of this year—its shares rose just 7.2%. Meanwhile, long-suppressed rivals AMD and Intel soared 171% and 278%, respectively, leaving the AI chip leader far behind. Behind this dramatic rotation lies a classic narrative of capital flowing from crowded mega-cap AI trades into relatively undervalued names. But as we enter the second half, the script may flip once again.
Let’s first examine the first-half drivers. Nvidia, as the absolute leader in the AI chip market, secured its position early with GPUs purpose-built for AI needs, generating record revenue growth over the past several years. But after an extended rally, Nvidia’s elevated valuation naturally became a target for profit-taking. At the same time, AMD and Intel made progress in their traditional stronghold—the CPU market—rekindling investor enthusiasm.
Intel has long dominated the CPU market, currently holding over 59% market share, while AMD has climbed from a low of approximately 17% in 2016 to 38% today. More critically, Intel has advanced its AI transformation strategy under CEO Lip-Bu Tan’s leadership, and last summer the U.S. government acquired a 10% stake in the company for roughly $10 billion—widely seen as a strong vote of confidence. In its latest quarterly report, Intel posted 7% revenue growth, marking the sixth consecutive quarter of beating expectations. AMD, meanwhile, has successfully grown its GPU business, complementing its CPU share gains.
However, the second-half narrative may reverse for two key reasons.
First, Nvidia is targeting the CPU market as its “second front.” CPUs are the critical chips driving “agentic AI”—the next-generation application scenario where AI autonomously solves real-world problems, widely expected to be AI’s next growth engine. Nvidia is set to launch its first-ever standalone CPU this fall as part of the Vera Rubin platform, alongside a “superchip” (GPU+CPU combination) for the personal computing market. The company already forecasts $20 billion in standalone CPU sales this year. While achieving full dominance in the CPU market won’t happen overnight, a successful Rubin platform launch with strong demand could trigger positive market reactions in the second half.
Second, the valuation pendulum is swinging. Nvidia currently trades at just about 22 times forward earnings—appearing “quite cheap” after its first-half consolidation. In contrast, AMD and Intel, after their triple-digit surges, now trade in expensive territory. Capital naturally tends to rotate from high-valuation to low-valuation names, suggesting the rotation direction could reverse in the second half.
It’s worth noting that AMD and Intel’s first-half surges have their own rationale—previous severe underperformance, improving fundamentals, and policy endorsements. But the sustainability of this catch-up rally depends on continued earnings beats. Nvidia, meanwhile, retains a deep moat in the AI chip market, and its CPU expansion story provides a fresh catalyst for the second half.
Taken together, Nvidia appears well-positioned to outpace its two rivals in the second half. A 22x forward P/E offers downside cushioning, while the CPU product launch opens upside potential. Of course, the competitive landscape in the CPU market will take time to evolve, but for the second half, valuation repair combined with new business catalysts tilts the odds in Nvidia’s favor. This is not just a battle of earnings—it is also a natural cycle of shifting market sentiment.
