Earlier today, we found out an unexpected point about the tech market. While the revelation of DeepSeek’s R1 artificial intelligence (AI) cut a swath through the market, one unexpected winner was Apple (AAPL). But as it turns out, there may be another such winner: chip stock Intel (INTC) may also benefit from DeepSeek. Investors were skeptical, though, as they sent shares down nearly 2% in Tuesday afternoon’s trading.
Invest with Confidence:
- Follow TipRanks' Top Wall Street Analysts to uncover their success rate and average return.
- Join thousands of data-driven investors – Build your Smart Portfolio for personalized insights.
So how does Intel come out ahead as a result of DeepSink? The idea is surprisingly simple; DeepSink represents a potential for new, “resource-light” model AI to make an appearance in the field. That in turn will likely put a crimp in the demand for AI hardware, since it simply won’t be necessary. That will be a major blow to Intel’s chief rival Nvidia (NVDA), and give Intel a boost in the process.
Moreover, with AI able to work on “general purpose compute” systems—like your standard desktop model—that opens up room for Intel to come roaring back. General purpose computing tools are Intel’s bread and butter core holdings, so that opens up a fresh market. And with Intel delivering new and improved options on that front, AI that works with the basics, plus Intel’s proficiency with the basics, could add up to a win.
Thanks! Pat Gelsinger
And then, in perhaps an even more unexpected twist, former Intel CEO Pat Gelsinger himself reached out to the DeepSeek team to offer up his personal thanks for their work. Gelsinger, on X—formerly Twitter—noted that “Wisdom is learning the lessons we thought we already knew,” and that DeepSeek’s work brought to mind “…three important learnings from computing history.”
The lessons in question: lower costs mean higher adoption rates, limited resources mean more ingenuity, and the concept of “open wins.” All “open wins” really means is that open source alternatives tend to see more development, because they are more accessible, and thus, more likely to spawn those innovations that carry the field forward.
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 four Sells assigned in the past three months, as indicated by the graphic below. After a 53.95% loss in its share price over the past year, the average INTC price target of $23.58 per share implies 18.4% upside potential.
