Can Intel's AI Focus Restore Its Competitive Edge & Boost Shares?

Per a Bloomberg news report, Intel Corporation (INTC) is in advanced talks to acquire AI start-up SambaNova Systems for about $1.6 billion. SambaNova is known for designing custom AI chips and systems. Acquiring an AI-focused company facilitates Intel with a ready-made AI architecture, software stacks and engineering talent, minimizing years of internal development time and speeding up its AI development plans.

If the deal materializes, it will help Intel to modernize its CPUs with AI chips and software, providing cloud and enterprise customers with a complete AI system. By using AI chip technology, Intel can make chips in its own factories, increasing its manufacturing strength and allowing it to attract more foundry customers.

Intel has launched new AI-powered chips that are faster and more energy-efficient, helping the company compete better in the growing AI market. It is gaining traction in AI infrastructure as Super Micro Computer has chosen Intel’s Xeon 6 processors for its high-performance enterprise servers.

The company has collaborated with Cisco to build a new integrated platform that supports distributed AI workloads. NVIDIA will invest $5 billion in Intel to build advanced technologies that will shape the future of AI infrastructure. Intel is actively investing in AI and is serious about competing in the fast-growing semiconductor market, signaling a credible comeback.

How Are Competitors Faring?

Intel faces competition from Advanced Micro Devices (AMD) and Qualcomm Incorporated (QCOM). Qualcomm focuses on making advanced chips for AI-powered PCs. Qualcomm launched the AI 200 and AI 250 chips to meet rising AI processing needs in data centers. HUMAIN has chosen Qualcomm’s AI200 and AI250 chips to provide high-performance AI services in Saudi Arabia and worldwide.

AMD is growing its AI business by launching new MI350 series accelerators and working with major partners like Amazon, Microsoft, Meta and Oracle to deliver faster and more powerful AI systems. AMD has entered into a long-term deal with OpenAI to power large AI systems using AMD’s Instinct GPUs starting in 2026. IBM and AMD are working with Zyphra to provide powerful AI infrastructure on IBM Cloud using AMD Instinct MI300X GPUs to train advanced AI models.

INTC’s Price Performance, Valuation and Estimates

Intel has rallied 79.3% over the past year compared with the industry’s growth of 31.1%.

Going by the price/book ratio, the company's shares currently trade at 1.53 book value, lower than 30.63 of the industry average.

Earnings estimates for 2025 have increased 128.6% to 32 cents, while those for 2026 have declined 10.7% to 59 cents over the past 60 days.

Intel stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research