This should have been a bigger day for chip stock Intel (INTC) than some believed. Intel CEO Lip-Bu Tan hit the Computex show in Taipei overnight to deliver a keynote speech in which he laid out some of Intel’s plans going forward. One of the biggest points was that Intel planned to get a piece of the entire artificial intelligence (AI) ecosystem, not just what it currently has. Investors remained skeptical, judging by the over 2% slide seen in Intel share prices in Tuesday afternoon’s trading.
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The keynote, “The Next Era of AI,” featured the conclusion that Intel would not be satisfied with AI accelerators, but rather had an interest in getting in on the whole range of options. This not only included end-user PCs, but also AI systems used on the edges of networks, data centers, and what were referred to as “intelligence centers.” Intelligence centers focus on large-scale operations like AI inferencing and agent workloads.
All of this is reasonable enough; Intel was working in some of these operations to begin with, and has been for years in some cases. The more areas Intel can successfully break into, the more likely its ongoing turnaround project will be a success.
Clearwater Forest Ships
Yesterday, we found out that the Clearwater Forest line, an 18A chip, was poised to take aim at the data center market, part of that plan to address the AI ecosystem that Lip-Bu Tan recently brought up. And now, reports note that the Clearwater Forest line is shipping now.
Clearwater Forest’s rise from its earliest beginnings to today’s shipments took over two years, some reports noted. But the chips should be worth the wait. Intel noted that the Xeon 6+ line can actually offer 30% improved performance for the same core count against the Sierra Forest lineup. It can also offer a 38% reduction in rack power use, and a 60% improvement in per-watt performance, making the Clearwater Forest a viable candidate for large-scale use.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on 10 Buys, 25 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 438.84% rally in its share price over the past year, the average INTC price target of $88.94 per share implies 16.99% downside risk.
