Seen as an also-ran chip player throughout 2022 and the first half of 2023, Intel (INTC) has suddenly programmed itself back into the good graces of Mr. Market.
Intel’s stock is up 13% in December compared to a 4.5% gain for the S&P 500, according to Yahoo Finance data. The company’s chief rival Nvidia (NVDA) has seen its stock cool a bit after a blistering year, logging a 5.3% advance on the month, while AMD (AMD) shares have jumped 18%.
Shares of Intel are up 91% year to date. In 2022, the stock plunged 48% amid a series of quarterly disappointments and product setbacks.
Despite the impressive price appreciation, Intel’s market cap is still well short of its main competitors that investors continue to view as ahead in the AI chips race.
Intel’s market cap currently stands at $212 billion, below AMD’s $231.7 billion and Nvidia’s $1.22 trillion, per Yahoo Finance comparison analysis.
At this point, Intel’s shareholders will likely take the gains following several years of product delays and deep restructurings.
The company’s strong December showing in the market reflects a few factors.
On Tuesday, Israel’s government awarded Intel a $3.2 billion grant for a $25 billion chip plant it intends to construct in southern Israel. The investment — part of CEO Pat Gelsinger’s efforts to build new plants to produce chips for other semiconductor players — is reportedly the largest ever by a company in Israel.
Intel currently employs 11,700 people in Israel. The company says it has invested more than $50 billion in the country over the last 50 years.
Meantime, Intel is fresh off some good products news for a change.
A week ago, Intel showcased a range of AI focused products and services. On display was Gaudi3, an artificial intelligence chip for generative AI software. The chip will officially launch next year.
Intel also showed off its Core Ultra processor that will target the emerging AI PC market.
The Street is hopeful the new chips will drive stronger sales and profits in 2024 amid the AI boom.
“The team is in a unique position to help unlock AI technology/capabilities across the different end devices given its broad compute product portfolio, software solutions, extensive ecosystem, and R&D scale,” JP Morgan analyst Harlan Sur said in a client note.
Gelsinger told Yahoo Finance Live he is ramping up production of these new chips like “crazy” (see above video) to be the dominant player in artificial intelligence.
“Only a couple of companies in the world can do this, and only one in the Western world and that’s Intel. So with that, we see a lot of market value creation yet in front of us. We’re still well undervalued compared to many peers, even as we’ve made good progress this year.” Gelsinger added. “So I see a lot of opportunities for us to create value for our customers, to create value for our shareholders.”
Investors appear to be betting on just that.
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email firstname.lastname@example.org.
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