Computing is undergoing a massive shift, and the company known for making the brains behind many of the world’s computers and servers has not shifted as fast as competitors.

Jefferies equity analyst Mark Lipacis came to that conclusion Monday, reporting in a note that Intel Corp. INTC, -0.85% stands to take a hit in its data-center business amid a move to a new computing paradigm focused on artificial intelligence and connected devices that he believes represents a “tectonic shift” in technology. Instead, Nvidia Corp. NVDA, -2.20% is best-positioned to be the chip leader in the new landscape, Lipacis wrote.

“With dominant market share in the data center, we think Intel has the most to lose as the industry shifts,” Lipacis wrote in the more all-encompassing note in a pair issued Monday morning, while suggesting that Nvidia “is years ahead of its competition.”

A shorter note included a downgrade of Intel, from hold to underperform, and dropped Jefferies’ price target on the stock to $29 from $38. Intel stock declined to a 52-week intraday low of $33.23 in Monday’s session following the downgrade, before closing down 0.7% at $33.65. Shares have dropped 6% in the past three months, as the S&P 500 index SPX, -1.11% has gained 3%.

Lipacis’s thesis on the semiconductor industry is that computing paradigms undergo dramatic shifts roughly every 15 years, with mainframe-focused technology giving way to minicomputers and then personal computers, and later to mobile phones and cloud data-center architecture. While Intel was a dominant player in the second and third epochs of the computing era, with its chips finding a home in PCs and data-center servers, Lipacis believes the current shift to parallel processing and the so-called Internet of Things will belong to different chip makers.

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Parallel processing has been important to the development of AI-focused developments in neural networks and deep learning, with the ability to work faster in tandem than the single microprocessor architecture espoused by Intel for the past two decades. With connected devices scattered throughout the world collecting data, the advanced computing techniques developed through those efforts will be better able to crunch and understand that data, which Lipacis believes will become a core function of technology.

“We believe we are at the start of the fourth tectonic shift now, to a parallel processing/IoT model, driven by lower memory costs, free data storage, improvements in parallel processing hardware and software, and improvements in AI technologies like neural networking, that make it easy to monetize all the data that is being stored,” he wrote.

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While Intel offers parallel processing solutions and plans to launch new chips aimed at data centers this year, Lipacis believes the world’s largest chip maker is too far behind other players that jumped on the trend earlier.

“We think those companies that have architected their hardware and software platforms from the ground up for parallel processing are best positioned to benefit,” Lipicis wrote, specifically mentioning Xilinx Inc. XLNX, -0.67% , Cavium Inc. US:CAVM and Advanced Micro Devices Inc. AMD, -2.11% as beneficiaries, along with Nvidia. Jefferies upgraded Xilinx and Cavium to buy ratings in conjunction with the note while maintaining a buy rating on Nvidia with a $180 price target.

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Nvidia may be the first major tech company to find large financial gains from AI, as its server revenue nearly tripled year-over-year in the most recently reported quarter, thanks to large cloud players like Alphabet Inc.’s Google GOOGL, -2.41% GOOG, -2.37% and Amazon.com Inc.’s AMZN, -1.78% Amazon Web Services gobbling up its graphics-processing units for advanced workloads.

Those gains have helped spark a huge jump for Nvidia stock, which is up 57.2% in the past three months and more than 200% in the past year. Shares increased another 4.7% Monday, after Needham analyst Rajvindra Gill pushed his price target to $200 from $130.

Gill focused more on another business Nvidia has championed with its AI focus, self-driving cars. Gill wrote that Nvidia’s deal for autonomous-driving technology with Toyota Motor Corp., announced at the chipmaker’s annual GTC conference in May, could bring in $1 billion to $1.7 billion in revenue during the next two years, based on discussions with Toyota execs on their plans to deploy the technology.

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Intel is also trying to catch up to Nvidia in self-driving cars, with its $15.3 billion bid for Mobileye NV US:MBLY . That deal has not yet closed.

As Nvidia’s stock price has skyrocketed, so have analysts’ price targets on the stock. The average target price for Nvidia was $93.30 at the end of last year, and is now $135.16, according to FactSet.