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shares of intel (NASDAQ:INTC) It has risen since the start on Monday and is up as much as 3.7%. As of 12:41 p.m. ET, the stock was still up 3.5%.
The semiconductor company’s rise was fueled by comments from Wall Street analysts about the current state of the chip industry.
potential opportunity
The news that came out late last week was Nvidia As Reuters first reported, the company was creating a business unit to design customized processors for cloud computing and artificial intelligence (AI). According to the report, this is in response to the “explosive expansion of the custom AI chip market” and is seen as a defensive measure to maintain market dominance.
After considering the situation, the analyst: american bank concluded that while the move could have long-term competitive implications for rival chipmakers, it is likely not to have any impact in the short term.
Although the report did not specifically mention Intel, analysts said they would not be “surprised” if Intel Foundry Services (IFS) emerges “as a possible alternative to foundry leadership.” taiwan semiconductor manufacturing Create these customer processors.
The AI gold rush has just begun
While the first wave of AI chips has primarily focused on computing performance, some users are starting to consider cost. The next wave of innovation is likely to focus on power consumption and optimization, potentially reducing the cost of AI and making it available to businesses with lower budgets.
Intel has bold goals for its foundry business, with plans to become “the world’s second-largest foundry by 2030,” according to Stuart Pang, Intel’s senior vice president and IFS general manager. .
Additionally, the custom chip market is estimated to top $30 billion in 2023, representing about 5% of annual global processor sales, according to Needham analyst Charles See.
After seeing the company’s stock price stay range-bound for the past five years, Intel investors are hoping the chipmaker can capitalize on its experience and continued demand for AI, but its success remains to be seen. There are pros and cons to its history. That said, this stock certainly deserves attention given the size of the opportunity.
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Bank of America is an advertising partner of The Motley Fool’s Ascent. Danny Vena He has a position at Nvidia. The Motley Fool has positions in and recommends Bank of America, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: Long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
“Why Intel Stock Soared on Monday Morning” was originally published by The Motley Fool
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