Why Intel Stock Is Rising Today

Intel (NASDAQ: INTC) The stock is gaining ground on Wednesday following the unveiling of two new artificial intelligence (AI) products. The company’s stock price was up 3.5% at 12:30 a.m. ET. The semiconductor stock rose as much as 5.5% earlier in the day.

Yesterday, Intel released the Xeon 6 central processing unit (CPU) and its Gaudi 3 AI accelerator. The new chips are critical to the next stages of the company’s strategy to gain ground in the data center AI space.

Intel launches its next-generation AI solutions

Intel reports that its Xeon 6 processor offers twice the performance of its predecessor and has been specially tailored for artificial intelligence applications. Meanwhile, the company says its Gaudi 3 AI accelerator offers a 20% throughput improvement and twice the performance on a price basis compared to Nvidiaof H100 for using inference Meta platforms‘ LLaMA 2 70B large tongue model (LLM). Gaudi 3 is still slower than NvidiaH100 and H200, but lower prices and solid performance specs could help attract customers.

What’s next for Intel?

Until now, Intel has struggled to score significant wins in the AI ​​space. Nvidia’s advanced graphics processing units (GPUs) continue to be the core hardware for AI inference and Advanced microdevices it also has its own CPU and GPU offerings, which add to the competitive pressures in the data center market.

Intel is also losing ground to AMD in the CPU market, and the recent launch of AI PCs has not provided the positive margin catalyst that many had previously anticipated. Complicating matters further, Intel is losing billions as it tries to grow its chip business so it can accommodate substantial business from third-party customers. While the company’s fabulous business has landed some significant contracts in recent times, competing with Taiwan Semiconductor Manufacturing the space will be very resource-intensive — and Intel’s financial footing appeared shaky.

There have been some reports that the company may split its chip design and manufacturing units into separate companies as a result of these challenges. There have also been reports of this Qualcomm is interested in buying some or all of Intel. While regulatory and valuation challenges make a full acquisition unlikely, Intel may sell some units or assets to improve its financial position.

Even with today’s buzz, Intel shares are still down about 53% in 2024 trading. The stock looks cheap by some metrics, but the business has been struggling lately — and there’s a high degree of uncertainty surrounding its path forward.

The story continues

Should you invest $1,000 in Intel right now?

Before buying Intel stock, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and Intel wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $740,704!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

See the 10 stocks »

*The stock advisor returns as of September 23, 2024

Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Nvidia, Qualcomm and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: Short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.

Why Intel Stock Is Rising Today was originally published by The Motley Fool