Yesterday, we caught wind of the new Crescent Island GPU out of chip stock Intel (INTC). At the time, it looked like it would be a good replacement for the two departing GPUs that Intel was looking to phase out, the Arctic Sound and the Ponte Vecchio. Intel immediately slammed the news into overdrive, with plans to start testing the Crescent Island chip next year. That news sent Intel shares racing up over 4% in Wednesday afternoon’s trading.
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Crescent Island, geared to be a data center GPU with a particular focus on inference workloads, is set to start testing in the closing half of 2026, reports note. This is actually the second time that Intel is looking to break into the AI accelerator market, since the Gaudi chips failed to catch on in their first go-round.
Intel missed out on the first wave of AI infrastructure expansion, which started up in earnest back in November 2022. But Intel is not planning to cede the market to competitors who got first-mover advantage. This is actually part of a larger plan at Intel to launch new AI data chips annually, and build the roadmap to “…more predictable yearly updates,” reports noted. Sachin Katti, Intel’s chief technology officer, noted, “Instead of trying to build for every workload out there, our focus is increasingly going to be on inference.”
“Of Course”
Meanwhile, former Intel CEO Pat Gelsinger came out in a big way on the entire AI marketplace. When asked during an interview on CNBC if we were in an AI bubble, Gelsinger simply said, “Of course.” Gelsinger even compared the rise of AI, which was largely missed during his tenure, to past technology cycles. The key difference, though, is that this particular cycle is much better and faster than those seen previously.
This bubble, however, is likely to have legs. Gelsinger noted, “I don’t see it ending for several years.” Indeed, there is a lot of potential to artificial intelligence, and that makes for a market in which the whole sector is, paradoxically “…overextended but underdeveloped.”
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on two Buys, 26 Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 59.7% rally in its share price over the past year, the average INTC price target of $27.98 per share implies 24.78% downside risk.
