Chip stock Intel (INTC) was recently spotted talking to Alphabet (GOOGL) about advanced packaging options, and it seems that those talks generated a new deal in the process. Intel will now be providing Xeon chips in data centers geared toward artificial intelligence. Investors reacted much as you might expect, and sent Intel shares jumping over 3% in Thursday afternoon’s trading.
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Alphabet’s Google arm will turn to Intel for chips to power data center operations. More specifically, Google will turn to Xeon 6 processors. Normally, this would be done by graphics processing unit (GPU) chips from Nvidia (NVDA), but central processing unit (CPU) chips are starting to come into vogue as an alternative for regular AI use as opposed to AI training. CPUs can be used in AI training as well, though, while some believe a GPU is more effective in training than a CPU is.
Google’s chief technologist for AI infrastructure, Amin Vahdat, noted, “Their Xeon roadmap gives us confidence that we can continue to meet the growing performance and efficiency demands of our workloads.” Terms of the deal, meanwhile, were not disclosed.
Ohio Project Coming Back
Some might have wondered what became of the Licking County, Ohio project that would have seen Intel build a huge new foundry operation therein. Not much has been heard about it since, but new signs suggest that Intel is putting further investment back into Ohio to get those production facilities off the ground.
Previously, the project had been back-burnered somewhat as demand was significantly lower than Intel had originally projected. But with new reports suggesting that Intel cannot make enough chips fast enough to meet demand, the project is back up and running. While the Ohio plant is still somewhat subject to finding buyers for the 14A process, reports also suggest that those buyers are likely to hit as soon as 14A shows up in the market.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on six Buys, 24 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 196.53% rally in its share price over the past year, the average INTC price target of $48.83 per share implies 19.86% downside risk.
