Intel
is a contender in the AI race, according to a Melius Research analyst who wrote that investors should pay attention to the computer product and technology maker’s next steps in the space.
Melius Research analyst Ben Reitzes rates
Intel
(ticker: INTC) as a Buy with a $46 price target, which implies a 21% upside from the stock’s closing price on Monday.
When investors think of AI, they tend to think of
Nvidia
(NVDA) and
Advanced Micro Devices
(AMD) as the top two performers, Reitzes said. But Intel’s AI chip, Gaudi, has been making some noise recently and is one reason for Reitzes’ bullish view on the stock.
Reitzes says that Wall Street has not yet priced in what this AI chip can do for the company’s top line over the next few years.
“While Intel needs to continue to make software inroads, the potential for hundreds of millions in Gaudi revenue is not in street models,” Reitzes wrote in a research note Monday.
In the company’s latest earnings call in July, Chief Executive Patrick Gelsinger said that Gaudi is one of Intel’s “strong, open alternatives in the AI market that compete on both performance and price versus the competition.”
Reitzes is not the only analyst with confidence in Intel’s AI future. Raymond James analyst Srini Pajjuri reiterated his Outperform rating and $42 price target on Intel on Thursday, and wrote in a note that “while Intel won’t likely get much credit for its AI efforts in the near term, we believe that the company is well positioned.”
Shares of Intel were down 1.2% Tuesday to $37.53. The stock has gained 42% in 2023.
Write to Angela Palumbo at [email protected]
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