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Intel (NASDAQ:INTC), a leading technology manufacturer, has been making notable progress in the field of artificial intelligence (AI), drawing the attention of investors and industry analysts. The company’s AI chip, Gaudi, has started to gain traction, contributing to a positive outlook on Intel’s stock. This was reflected in the recent ratings by Melius Research’s Ben Reitzes and Srini Pajjuri from Raymond James.
On Tuesday, Intel’s shares were up by 1.2% in premarket trading to $38.43. This follows an impressive performance so far in 2023, with the company’s stock showing a 44% gain.
Reitzes rated Intel’s stock as a “Buy” with a $46 price target on Tuesday, suggesting a promising 21% upside from the stock’s closing price on Monday. He expressed confidence that the market has not fully accounted for the potential impact this AI chip could have on Intel’s revenue in the coming years. In his recent note, he indicated that while Intel needs to continue its software advancements, the potential for generating hundreds of millions in Gaudi revenue is not yet reflected in current market predictions.
Pajjuri also reiterated his “Outperform” rating with a $42 price target on Intel. Despite likely not receiving immediate recognition for its AI efforts, he believes Intel is well positioned in the long run.
Intel’s CEO, Patrick Gelsinger, during the company’s latest earnings call in July, highlighted Gaudi as one of Intel’s strong contenders in the AI market. He emphasized that it competes on both performance and price fronts against other players in the industry.
Traditionally, Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) have been seen as the leading players when it comes to AI technology. However, Intel’s recent strides into AI have started to shift this perspective among industry analysts and investors alike.