Intel stock saw an increase on Tuesday following remarks from Melius Research analyst Ben Reitzes, who emphasized the importance of the company’s forays into artificial intelligence (AI). Reitzes rates Intel (ticker: INTC) as a Buy with a $46 price target, suggesting a 21% upside from the stock’s previous closing price.
While many investors associate AI with companies like Nvidia (NVDA) and Advanced Micro Devices (AMD), Reitzes believes that Intel’s AI chip, called Gaudi, should not be overlooked. The recent attention surrounding Gaudi is one of the key factors driving Reitzes’ optimistic stance on the stock.
Reitzes argues that Wall Street has not fully accounted for the potential revenue that Gaudi could generate for Intel in the coming years. In his research note, he stated, “While Intel needs to continue making progress in software development, the potential for hundreds of millions in Gaudi revenue is not reflected in current street models.”
During Intel’s latest earnings call in July, CEO Patrick Gelsinger affirmed that Gaudi represents one of Intel’s “strong, open alternatives in the AI market that compete on both performance and price versus the competition.” This declaration further corroborates Reitzes’ belief in Intel’s AI prospects.
Reitzes is not alone in his positive outlook on Intel’s future in AI. Another analyst, Srini Pajjuri from Raymond James, recently reiterated an Outperform rating and a $42 price target for Intel, stating that despite any immediate recognition of Intel’s AI efforts, the company’s positioning is favorable.
In premarket trading on Tuesday, Intel shares rose by 1.2% to reach $38.43. So far in 2023, the stock has demonstrated significant growth, gaining 44%.