Intel stock has risen 32% over the last 12 months.
David Paul Morris/Bloomberg
Intel may become a beneficiary from the rising excitement for artificial intelligence, Raymond James says.
On Thursday, analyst Srini Pajjuri reiterated his Outperform rating for Intel stock (INTC), citing coming processors that could be used for AI applications. He has a $42 price target on the chip maker. In early trading Thursday, Intel shares were roughly unchanged at $38.60.
“While Intel won’t likely get much credit for its AI efforts in the near term, we believe that the company is well positioned,” the analyst wrote. We see “moderating share losses, improving roadmap execution, foundry progress, and long term AI opportunity.”
Pajjuri expects Intel to talk prominently about its future AI chips at its developer conference next week. He said the company’s Gaudi AI accelerators can be competitive to market-leading Nvidia ’s products for smaller-size AI workloads.
Gaudi “could drive meaningful revenue contribution in 2024,” he said.
Some analysts have grown concerned that Intel may face near-term pressures as customers prioritize buying AI-related chips over traditional Intel CPU processors. But Pajjuri played down this risk.
“The impact from GPU cannibalization has been manageable thus far, and we continue to believe that AI proliferation will benefit most data center chips, including CPUs, longer term,” he said.
Intel shares have risen by 32% over the last 12 months.
Write to Tae Kim at [email protected]
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