Chip stock Intel (INTC) has not exactly been shy about investing in other companies of late, and now, one more target has emerged: an artificial intelligence (AI) chip startup called Tenstorrent. The chip startup may offer some powerful new tools for Intel to put into its own arsenal, and other companies are actually also starting to look at Tenstorrent. Investors were skeptical, though, and shares slipped fractionally in Thursday afternoon’s trading.
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Tenstorrent’s focus, reports note, is on chips that handle AI-related workloads more efficiently. That would be welcome news for just about any company, particularly given that AI has taken center stage these days in the tech sector. Reports suggest that Tenstorrent could be worth $5 billion, or potentially more, depending how the market shakes out over the coming weeks.
In fact, Intel is not the only company looking to acquire Tenstorrent. Reports note that Qualcomm (QCOM) has also set its sights on Tenstorrent, looking to get a line of chips together that can supply the growing AI sector. But Tenstorrent may not be interested in selling, as reports also note that it is looking to land investments on its own.
“A New Intel”
We know that Intel has spent a lot of time these days—and nowhere near as much cash—trying to reinvent itself. We know it has laid off a lot of staff, focused its efforts, shaken up its org chart, and done a dozen other things in a bid to make itself faster, stronger, and overall better. In fact, reports suggest that Intel is working to be a “New Intel,” and one that works at a “…speed-of-light pace….”
The org chart might be the biggest change at Intel. Where formerly, there were 12 layers of management, there are now only five. Many engineering leaders report directly to CEO Lip-Bu Tan himself. But more interesting is the “bad news first” philosophy at Intel, which requires problems to be “surfaced” within 24 hours, while also cutting back on meetings and improving accountability standards.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on 11 Buys, 24 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 478.88% rally in its share price over the past year, the average INTC price target of $87.09 per share implies 26% downside risk.
