Chip stock Intel (INTC) may be on the cusp of a serious spending boom from other sources. Artificial intelligence (AI) development depended on graphics processing units (GPUs) for a long time, especially in getting AI systems trained. But now, the tables are turning, and central processing units (CPUs) are becoming the most valuable component here. CPUs are Intel’s bread and butter, and that may mean good things for Intel. Investors are a bit skeptical, though, based on the nearly 1.5% drop seen in Intel shares in Wednesday afternoon’s trading.
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Intel’s recent surge in share price seems to be largely predicated on the notion that Intel’s primary stock in trade, CPUs, will be the driving force for AI development to come. This is not out of line. But this does not mean an automatic win for Intel, either; there are plenty of competitors in the CPU space, just as there were plenty in the GPU space as well.
Intel is working hard toward improving its foundry operations, and there are signs that big-name operations will be moving over to Intel as CPUs become more valuable to AI development. But signs are not contracts, and this is the point that may have investors concerned right now. The large-scale foundry operation will be vital toward taking full advantage of the chip trade, and Intel is still building that operation today.
Framework Laptops Get an Intel Boost
For those not familiar with Framework laptops, this is a line of laptops that were intended to be readily fixed and upgraded by the end user. Called “modular” laptops, these tools offer remarkable versatility, and Framework users got a pleasant boost today. Framework has a new “pro” version of its 13-inch laptop coming out, and the versatility is already on hand.
If you already own a Framework laptop, you will be able to pull components from it to put in this new laptop, and vice versa, reports suggest. Nearly all of the new laptop’s components will be compatible with the rest of its ilk. But the pro version will come with several new features, including a haptic trackpad, an improved battery, and a custom touchscreen display. The pro version will also boast Panther Lake chips for extra processing power.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on seven Buys, 23 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 221.81% rally in its share price over the past year, the average INTC price target of $56.41 per share implies 13.57% downside risk.
