Nvidia Corp. shares surged more than 8 percent on Wednesday amid speculation that the graphics firm may be acquired by Intel Corp, however experts said on Thursday that a sale would be irrational.
Following AMD's acquisition of graphics firm ATI Technologies in July for over $5 billion, rumors have been rampant whether Intel would follow suit, purchasing ATI rival, Nvidia. Experts believe that the synergy between AMD and ATI is stronger than Intel and Nvidia, however.
We donâ€™t think thereâ€™s a solid rationale for a deal and we donâ€™t think itâ€™s going to happen, research analyst Joe Osha said.
Osha contents that AMD acquired ATI to build a working platform strategy for itself, leveraging the smaller firms graphics expertise with its own processor knowledge. Intel has that already, he said, referring to its existing graphics division.
Nvidia shareholders may not be inclined to endorse the deal either, seeing Nvidia's potential for growth in the up-coming quarters.
With discrete GPU [graphic processing units] attach rates likely to increase as Microsoft Vista rolls out, and market share likely to go up, weâ€™d think that NVIDIAâ€™s management and shareholders have high hopes for the company as an independent entity, Osha stated.
Convincing them to vote for a deal could be tough.