Anyone who has been following chip stock Intel (INTC) in the last few months knows that one of its biggest problems has been finding clients for its foundry processes. And as it turns out, today may have brought with it exactly the revelation that Intel needed. It turns out that Intel may have a new client for its manufacturing processes, and it is none other than one of Intel’s biggest rivals: AMD (AMD). This news sent Intel stock on a tear, up nearly 3.5% in Thursday afternoon’s trading.
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Naturally, these are still early-stage talks, so do not look for contracts to start flying any time soon. They may never materialize, in fact. But right now, reports suggest that Intel’s foundry operations could be making chips for AMD. This would be a serious win for Intel on several fronts; not only would it be a direct addition to cash flow, but it would also be a clear sign that one of Intel’s biggest competitors thinks so much of Intel’s operations that it is willing to do business with Intel.
Since the agreements are still early-stage, exact numbers about quantities produced and cash paid are up in the air. And neither Intel nor AMD would comment on the matter, which leaves us with one serious new development to watch out for.
Tenstorrent Kicks In
That was not the only new potential development. Tenstorrent, a startup that focuses on building computers for AI, is looking into manufacturing partners, and Intel is on the list. While Tenstorrent is looking to major names like Samsung (SSNLF) and Taiwan Semiconductor (TSM) for two-nanometer chips, Intel is currently being considered for future operations.
Intel will have to do some convincing to get Tenstorrent on board, however; the company’s founder and CEO, Jim Keller, noted that Intel still has “…a lot of work to do…to deliver a really solid technology roadmap.” With the 18A process getting started, and 14A in the wings, that roadmap may be closer to complete than anyone might expect.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on two Buys, 27 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 61.46% rally in its share price over the past year, the average INTC price target of $26.18 per share implies 29.6% downside risk.
