Chip stock Intel (INTC) is making moves under new CEO Lip-Bu Tan, and those moves are starting to look downright ambitious. The foundry program may not be in a state to break even for another two years or more, but it is already drawing customers, and even has a new target in mind: Samsung (SSNLF). Interestingly, there are signs that Intel may get some help on this front from Taiwan Semiconductor (TSM). And Intel shareholders collectively held their breath as shares were down fractionally in Thursday afternoon’s trading.
Confident Investing Starts Here:
- Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
Reports note that Intel is out to take over Samsung’s slot in the contract chip market. That is a major push, as Samsung is reportedly number two in the market behind Taiwan Semiconductor. And Intel is not giving itself a lot of runway to make that push, either, planning to achieve that number two slot by 2030. And with Intel finally about to compete in the 1.8 nanometer stakes, and gearing up to take on the 1.4 nanometer field soon enough, it may be able to hit that target after all.
One major edge for Intel is that it is prepared to go after markets that Taiwan Semiconductor does not particularly want, reports noted. Taiwan Semiconductor’s artificial intelligence (AI) chip output will likewise continue to be anemic in 2025, giving Intel a bit more room to make its play. Throw in a solid amount of intellectual property around packaging efforts, and Intel does have a viable path to victory here. While Intel may never be top of the heap, its ability to take over second place is not out of line.
Pushing on AI
And we know that Intel has been making moves into AI as well, having just seen a partnership effort between itself and NetApp (NTAP) come further into fruition. But another point also recently emerged in the Xeon 6 central processing unit (CPU) line. With power demand from data centers poised to rise as much as 165% by 2030, there is clearly a demand for processors in data centers, and as AI drivers. The Xeon 6 is starting to prove a valuable alternative here.
The Xeon has already proven itself valuable as a data center processor, and that is making it also an attractive play for AI applications as well. Given that the Xeon line is also sufficiently “diverse and complementary,” it lends itself well to a variety of use cases and applications. That makes Intel’s processor lineup a powerful new addition to the market, and a serious potential winner.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 25 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 32.81% loss in its share price over the past year, the average INTC price target of $21.23 per share implies 1.21% downside risk.
