Intel (INTC) was seen as a laggard in 2022 and the first half of 2023, but suddenly it is back in favor.
According to the statistics, Intel’s stock price rose 13% in December, while the S&P 500 index rose 4.5%. Shares of the company’s main rival Nvidia (NVDA) have cooled after a hot year, rising 5.3% this month, while Advanced Micro Devices (AMD) has gained 18%.
Intel’s stock price has risen 91% this year. The stock plunged 48% in 2022 amid a series of disappointing earnings results and product misses.
Despite the impressive share price performance, Intel’s market capitalization remains well below its main rivals leading the race for artificial intelligence (AI) chips.
Intel’s current market value is $212 billion, which is lower than AMD’s $231.7 billion and Huida’s $1.22 trillion.
But Intel shareholders may be in for a bitter end after several years of product delays and deep restructuring.
The company’s strong performance in the market in December reflected several factors.
The Israeli government provided a $3.2 billion subsidy to Intel on Tuesday (26th) to build a $25 billion chip factory in southern Israel. According to reports, the investment is the largest single corporate investment in the history of an Israeli company.
Intel currently has 11,700 employees in Israel. The company has invested more than $50 billion in the country over the past 50 years.
At the same time, Intel has just released some product news to change things up.
A week ago, Intel showed off a series of AI-focused products and services and launched Gaudi3, an AI chip used to produce AI software that will be officially launched next year.
Intel also showed off its Core Ultra processor for the emerging PC AI market.
Wall Street hopes the new chips will drive stronger sales and profits in 2024 amid a boom in AI.
JPMorgan analyst Harlan Sur said in a note to clients: “Because of its broad computing product portfolio, software solutions, broad ecosystem and research and development scale, the team is helping to unlock AI technology across different end devices. It is in a position unique in functionality and practicality.”
CEO Kissinger said it was “crazy” to expand the production of these new chips in order to become a leading player in the field of AI. “There are only a few companies in the world that can do this, and there is only one company in the Western world, that is Intel. So there is a lot of market value creation ahead of us. We are still being significantly undervalued compared to other companies.”
Although we have made good progress this year, we are still undervalued compared to many of our peers, he said. “So I think there will be many opportunities to create value for customers and shareholders.”
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