Intel (NASDAQ:INTC) is gearing up for the rising competition in the data center market and launched its next-generation Xeon server processors. Moreover, the chip giant stated that its Gaudi 3 artificial intelligence accelerator chips would be priced below its rivals’ products.
Intel has priced the Gaudi 3 accelerator kit at around $125,000, and the earlier generation Gaudi 2 has a price tag of $65,000. In contrast, an Nvidia (NASDAQ:NVDA) HGX server system with AMD CPUs is priced at more than $300,000.
Competition in the Data Center Market Is Heating Up
This move from Intel is even as the company is losing data center market share to AMD (NASDAQ:AMD). According to a Reuters report, citing data from Mercury Research, Intel’s share of the data center market for x86 chips has declined 5.6 percentage points year-over-year to 76.4%. At the same time, AMD currently has a market share of 23.6%.
As the buzz around AI increases, chip companies are rising to the challenge and launching quicker processors. Nvidia unveiled new AI chips recently and even AMD has revealed its new artificial intelligence (AI) chips, including the Ryzen AI 300 series, Ryzen 9000, and MI325X accelerator.
Details on Intel’s Xeon Processors
Intel’s Xeon 6 server processors will come in two versions with a larger, more powerful version and an “efficiency” processor that the company is touting as a replacement for older-generation chips. Furthermore, Intel’s powerful performance model will be able to generate responses from complex AI models and will be available later this year.
On the other hand, the company’s “efficiency” Xeon chip will be available from Tuesday onwards with plans to unveil additional variations next year.
Is Intel a Buy or Sell?
Analysts remain sidelined about INTC stock, with a Hold consensus rating based on three Buys, 26 Holds, and three Sells. Year-to-date, INTC has declined by more than 35%, and the average INTC price target of $37.87 implies an upside potential of 25% from current levels.
