Intel Stock (NASDAQ:INTC) Continues Slide as it Abandons AI Training

Business Insider

2 days ago

Honestly, right now, it is hard to tell whether to give chip stock Intel (INTC) credit for a newfound focus or be terrified that it is on its way to producing virtually nothing. In fact, Intel recently called it quits in the artificial intelligence (AI) training market, a move which left shareholders shaken. Intel shares dropped nearly 2% in Wednesday afternoon's trading.
Elevate Your Investing Strategy:
Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
In something of a bold move, Intel departed one market to focus instead on another: inference. Specifically, Intel is now set to focus on '…edge and agent-based' inference, a move which might actually be better for Intel in the long run. Reports suggest that the inference market may ultimately surpass the training market in terms of overall value.
After the Gaudi 3 chip failed to make much impact on the market, Intel instead pulled back to edge AI, agentic AI, and foundry services. Edge AI refers to both 'local' systems that do not need data center or cloud data deployments and some remote systems not connected to larger operations. Agentic AI, meanwhile, focuses on chips that can act without much, if any, human intervention.
18A Process Remains Uncertain
There were some signs, first seen not so long ago, that suggested Intel may be planning to shut down the 18A process. And new reports lend at least some credence to that theory, though not a complete admission of abandonment.
The new reports suggest that Intel is likely to use the 18A process to fabricate the Panther Lake line of mobile processors. But the Nova Lake processors are instead being taped-out through the N2 process from Taiwan Semiconductor (TSM). Intel was already an 'early client' for the N2 process, and it seems like it may be putting that process to work before it can get the 14A process, which was to ultimately replace the 18A process, up and running. Given some reports that suggested 18A would be used internally, as opposed to being used for foundry customers, the new revelation about Nova Lake may provide some support for that notion.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 33.49% loss in its share price over the past year, the average INTC price target of $21.60 per share implies 4.21% downside risk.