Chipmaker Intel (INTC) has been taking it on the chin lately, and a new surprise has recently landed. For a long time, Intel was second only to Nvidia (NVDA) in the data center market, thanks to the rise of Nvidia’s graphics processors. Now, Intel is also behind Advanced Micro Devices (AMD).
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Intel, which had already been sliding thanks to growing competition in the chip sector, is now losing on a new front: data center sales. Intel is still top of the heap for servers in data centers—the Xeon processor is still the leader—but for the highest-end data center hardware, more units are incorporating the EPYC processor rather than the Xeon.
The biggest reason might be price. While Intel’s highest-end processor, a 128-core Xeon known as the 6980P “Granite Rapids,” costs $17,800, AMD’s 96-core 6979P runs just $11,805. That is a pretty significant savings. But a Tom’s Hardware report suggests that all Intel really needs to do to get back on track is ramp up its production of Granite Rapids. However, there are few signs that Intel is taking that step.
The Good News
Meanwhile, Intel’s money woes might be coming to an end. This is likely what drove up Intel’s share price in Tuesday’s trading, as new reports say that Silver Lake and Bain Capital are both looking to prepare bids for Intel’s minority stake in Altera.
There are no signs of just how much the two firms will pay, but having them in the hunt suggests that a little competition will kick-in. That could be particularly good for Intel, which is looking to get back at least some of the $17 billion it put up almost 10 years ago to buy Altera. This is still early-stage stuff, but given Intel is still looking for its CHIPS Act money, it is a development Intel is likely eager to see happen.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 23 Holds and seven Sells assigned in the past three months, as indicated by the graphic below. After a 37.78% loss in its share price over the past year, the average INTC price target of $24.35 per share implies 4.96% upside potential.
