Fantastic news hit today for chip stock Intel (INTC), as new reports suggest that Nvidia (NVDA) will be pivoting some of its production to Intel instead of to TSMC (TSM). At a time when Intel needed customers badly, especially as its 14A node gets fired up in earnest, this news was a downright blessing. This delivered a big win for Intel, and investors as well. Intel shares blasted up over 11% in Wednesday afternoon’s trading.
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Nvidia wants to step in with Intel on the 2028 Feynman architecture platform, as part of a plan to get more into “low-volume, low-tier, non-core” production. This allows Nvidia to keep its relationships with TSMC, but also keep production up on other areas, in response to government imperatives to keep production up and running.
At last report, TSMC will keep the graphics processing unit (GPU) die, but Intel will put its 18A process to work on parts of the input / output (I/O) die. Intel will get a share of advanced packaging as well; while TSMC will have 75% of final packaging, Intel will handle the other 25% itself. And these numbers are likely to expand once Intel fires up the 14A program in earnest starting in 2028.
Cramer’s Contrarian Call
Meanwhile, Intel’s frequent price fluctuations of late have left it a bit vulnerable to some analysts, but not to Jim Cramer of CNBC fame. Cramer actually believes that there is still room to grow for Intel stock, and that Intel CEO Lip-Bu Tan has “…a lot up his sleeve.”
Cramer went on to declare that Intel “…will be a very hot stock,” and that if “…you give up on it, I think you’re making a big mistake.” Granted, Lip-Bu Tan has been working feverishly to generate value for Intel. That is not surprising given that Tan has money in Intel himself beyond merely keeping his job. But there are some market forces that not even a CEO can overcome, and suggesting that Tan might be able to do that could be a bridge too far.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on seven Buys, 19 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 122.43% rally in its share price over the past year, the average INTC price target of $48.22 per share implies 1.83% downside risk.
