Chip stock Intel (INTC) took a bit of a hit in trading today thanks to some rough news. Nvidia (NVDA) was considering using the 18A process for some of its chipmaking duties, but seems to have pulled back instead, despite earlier reports suggesting Nvidia was planning to get involved with Intel. The news hit hard, and sent shares down over 4% in Friday afternoon’s trading.
Claim 50% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
The reports are starting to get a bit murky here. While recent reports suggested that Nvidia was planning to shift some of its work Intel’s way, earlier reports noted that Nvidia tested out Intel’s 18A process back in December, and revealed then that it would not use it for production. Previously, reports noted that Nvidia was looking to get Intel involved in some production work to take some of the weight off Nvidia’s connection to TSMC (TSM). Intel was to have 25% of advanced packaging, as well as parts of the input/output (I/O) die.
So the question becomes, why did Nvidia seemingly pivot, in the space of a month, from not being willing to use the 18A process to being willing to use the 18A process to produce some of its hardware? The answer there may be as simple as a small shift at TSMC. We know that TSMC regards Intel as suitable for its “spill-off” work, a point we noted just two weeks ago. So it may be that Nvidia simply changed its mind in light of the fact that TSMC is fully booked.
Huge New AI Chip Test
Meanwhile, Intel is also putting in some work on research and development, producing what some reports called a “…massive AI processor test vehicle.” The new system in question is designed to show off just what Intel Foundry can do, and it showed that much off in a very big way.
The new item Intel revealed is an “8 reticle-sized system-in-package”. This comes with four logic tiles, two I/O tiles, and 12 HBM4-class stacks. While Intel actually presented an even larger version last month, the difference is that the new system can actually be produced right now. This AI chip test vehicle is designed to show off exactly what Intel Foundry can do, this second, and in large numbers. It also reveals that the next generation of AI processors will likely be “multi-chiplet” designs, and Intel Foundry is ready to make them immediately.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on eight Buys, 20 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 150.44% rally in its share price over the past year, the average INTC price target of $48.36 per share implies 4.25% upside potential.
