Intel (INTC) stock is down 5% on Tuesday shortly after announcing a new $100 billion investment in SambaNova Systems. Analysts at Wedbush said this week the investment should help the semiconductor giant’s artificial intelligence ambitions. Intel and SambaNova have not yet commented on the reported investment plans.
“In our view, for a significant period of time, SambaNova appeared to trail a number of its early AI silicon peers (Groq, etc.), but with AI demand continuing to lift,” Wedbush analyst Matt Bryson wrote in a note to clients. “The value of AI design talent [is] increasing; and not all custom ASIC efforts progressing as planned (highlighting the inherent difficulties in designing and building an AI processor), it makes sense to us that SambaNova’s perceived value is lifting.”
Despite the recent dip, Intel (INTC) remains one of the top tech stocks on the US market. The semiconductor giant has trumped Nvidia and AMD in the past year in terms of stock growth, and is now closing in on NVDA in the AI race on several levels. Additionally, the Sambanove investment isn’t the only big move Intel has swung as of late. The company is now putting more visible weight behind AI infrastructure and high-performance computing. Its alliances with Saimemory and HKUST give it additional technical resources that sit closer to leading-edge AI workloads, from advanced memory to research focused on efficiency.
From here, it is worth watching whether Intel can turn these partnerships and leadership changes into design wins in data centers and AI projects, and how that shows up in segment sales and margins over time. Most Wall Street analysts who are bullish on the AI sector still see further upside for INTC, as reflected in recent price forecasts. However, some bears remain. Current price targets for Intel vary, with Loop Capital and Rosenblatt setting a $25 target, significantly below the current market price of $46. Truist Securities offers a slightly more optimistic $39 target.