Jefferies downgraded Intel from hold to underperform on Monday, saying the chipmaker has the "most to lose" in the "4th tectonic shift in computing."
Jefferies calls out several areas of concern for Intel, including Microsoft's Windows new support for ARM processors and the rapid 200 percent growth of Nvdia's data-center business year over year.
Nvidia has been one of the market's hottest stocks recently; SoftBank Group bought a $4 billion stake in Nvidia in May. Shares of Nvidia are up 28 percent this year.
In a separate note on the semiconductor sector, Jefferies says it sees a major "tectonic shift" in the industry that will favor parallel computing platforms already used by AMD, Nvidia, Cavium and Xilinx.
Earlier tectonic shifts noted by Jefferies included the mainframe era in the 1950s; the minicomputer era in the 1970s; the personal computer era in the 1980s and 1990s; the cellphone/server era in the 2000s and the parallel processing IoT era we're just now entering.
"NVDA was the first to recognize and successfully invest in a HW/SW platform (GPU/CUDA) targeted specifically at parallel processing applications, and our field checks suggest it is years ahead of its competition," Jefferies said, referring to Nvidia's strategy to take advantage of computing power from graphics processing units versus standard processors.
Jefferies reset its 2018 price target for Intel to $29 from $38. Shares of Intel were at $33.30 in Monday's premarket, down 1.7 percent.