There is no doubt that chip stock Intel (INTC) has surged upward in the last few months. A look at its latest figures notes it is up over 460% against this time last year. Some believe the easy money has come and gone, and others think a “bubble” is in progress. But Dan Niles with Niles Investment Management believes that the sun has not yet set on Intel stock. Investors seemed to agree, and gave Intel a fractional boost in Wednesday afternoon’s trading.
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In fact, Niles believes that Intel is on the cusp of “…a massive hardware resurgence,” reports note. Basically, Niles notes what several others, including us here at TipRanks, have noted for some time now. Artificial intelligence (AI) is making a switch from graphics processing units (GPUs) to central processing units (CPUs) and that is where Intel comes much more into play.
Agentic AI, as it is known, requires a lot more tokens to run. And it also depends a lot more on data organization, which is where a CPU truly shines. Thus, the demand for hardware is shifting. Previously, the ratio of demand for GPUs to CPUs was around eight-to-one. It is now closing in on one-to-one, and that means a potential big win for Intel.
A Hand in Google
Meanwhile, Alphabet’s (GOOGL) upcoming line of Googlebook laptops is also going to mean benefit for Intel. Intel processors will be in several of these laptops. Though it will not have the entire line to itself—Qualcomm (QCOM) and other companies are also getting in on the action—it will give Intel a big new partner to work with.
Intel recently noted, “We’re thrilled to partner with Google on something we’ve been building with them—Googlebook. Premium, powerful devices designed for Intelligence. We can’t wait to get it into your hands this fall.” The Googlebook is said to be similar to the Chromebook, but with more smartphone integration and a clearer focus on AI.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on 11 Buys, 24 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 460.46% rally in its share price over the past year, the average INTC price target of $82.70 per share implies 31.44% downside risk.
