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Investing.com - Intel (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA) announced a strategic collaboration to develop multiple generations of custom data center and personal computing products, with Stifel maintaining a Hold rating and $24.50 price target on Intel. Intel’s stock has shown remarkable momentum, surging nearly 27% in the past week and trading close to its 52-week high of $32.38.
The partnership focuses on integrating Nvidia’s accelerated computing and AI stack with Intel’s x86 CPU architecture, utilizing Nvidia’s NVLink interconnect technology. This collaboration is currently limited to product development rather than financial investment. According to InvestingPro data, Intel commands a market capitalization of $142.2 billion and generates annual revenue of $53.07 billion, positioning it as a prominent player in the semiconductor industry.
Stifel views the partnership positively for both companies, noting it combines Intel’s established expertise in x86 computing architecture with Nvidia’s leadership in GPU technology. The firm believes this alliance will allow Intel to participate in higher-density rack-scale AI infrastructure, an area where the company has previously lacked presence. InvestingPro analysis indicates the stock may be overbought, with analysts maintaining a hold consensus and setting price targets ranging from $14 to $34. Discover 8 more exclusive InvestingPro Tips and comprehensive financial analysis in our Pro Research Report.
The timing for when these new integrated systems will reach the market remains unclear, according to Stifel’s analysis. The firm maintains its $24.50 price target on Intel stock.
Stifel considers the announcement a "modest negative" for AMD (NASDAQ:AMD), which competes with both Intel in CPUs and Nvidia in GPUs, though the impact timeline remains uncertain.
In other recent news, Intel has announced a significant partnership with Nvidia, with Nvidia investing $5 billion in Intel’s common stock. This collaboration aims to develop custom data center and PC products, integrating Nvidia’s AI and accelerated computing technologies with Intel’s CPU capabilities. The partnership is expected to enhance Intel’s market share and foundry revenue, as noted by Baird, which views the collaboration as a positive catalyst for Intel. Meanwhile, Wedbush has upgraded Intel’s stock rating, citing the company’s potential in the growing AI infrastructure market, projected to reach substantial spending by the end of the decade.
Barclays has also raised its price target for Intel from $19.00 to $25.00, maintaining an Equalweight rating. This adjustment comes after Intel’s integration of x86 with NVLink, which Barclays believes will expand Intel’s data center opportunities. Truist Securities, however, has reaffirmed a Hold rating on Intel, maintaining a $21.00 price target, and expressed caution regarding the company’s uncertain recovery path. These developments reflect a mixed but cautiously optimistic outlook on Intel’s strategic initiatives and market potential.
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