INTC Recovers as Analysts Ponder Future of Lunar Lake Chips for AI

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  • Intel shares rose about 5% on Monday as attention shifted to its Lunar Lake chips.
  • Clearbridge Large Cap Value Strategy fund drives investment in Intel.
  • Melius Research predicts that the new AI chips will bring Intel back to its roots.
  • Markets were mixed on Friday as traders awaited earnings results.

Intel (INTC) The stock rose more than 5% on Monday as the battered legacy semiconductor is attracting new attention from Wall Street analysts and institutional investors, with the biggest focus being on Intel's upcoming Lunar Lake chips, which should help the company enter the burgeoning AI laptop market.

Stock markets were broadly mixed on Monday afternoon, with many participants awaiting Consumer Price Index (CPI) inflation data on Thursday and second-quarter bank earnings releases on Friday.

Intel stock price news

Melius Research analyst Ben Reitzes recently published a report arguing that Intel is gaining exposure to the AI ​​theme through price-sensitive means. Nvidia (NVDA), Taiwan Semiconductor (TSM) and Super Microcomputer (SMCI) While he has received most of the stock price growth in the AI ​​seat, Reitzes believes a “catch-up” deal would benefit Intel. Apple (AAPL) and Advanced Micro Devices (AMD) It was seen as being left behind in the first half of the year, but recovered in the second half.

“[Microsoft’s delayed AI Recall feature] That should eventually be fixed, and AI-enabled PCs should start featuring Intel's Lunar Lake chips and AMD's Strix Point processors, which should result in big gains by the fourth quarter, Reitzes wrote.

Before the latest rebound that began last week, Intel had fallen 40% heading into the second half of the year and was one of the worst-performing stocks in the entire S&P 500 index over that period. With shares generally cheap, Reitzes expects a “seasonal rebound” to provide relief.

Intel announced its Lunar Lake chips a little over a month ago, but the market has only recently begun to anticipate the chips' potential.

The system-on-chip includes a CPU, integrated GPU, and neural processing unit (NPU), the latter of which gives Lunar Lake chips three times the performance on AI tasks than their predecessor, Meteor Lake chips: Lunar Lake can process 40 Tera Operations per Second (TOPS), four times faster than its predecessor.

Now, Intel says its Lunar Lake chips are 40% faster than Qualcomm's Arm-based Snapdragon X Elite chip, which Microsoft is using in its new Copilot Plus PC. What's more, the company boasts that an entirely new architecture significantly reduces the energy the chips need to operate, and laptops with the chips boast 60% better battery life.

Meanwhile, portfolio managers at the ClearBridge Large Cap Value Strategy fund said they expect Intel's performance to recover in the second half of the year.

“We have a contrarian view on Intel and do not believe the company will be an AI loser. Rather, we see an undervalued opportunity in a company where Intel is strongly positioned as AI-enabled PCs proliferate over the coming quarters,” wrote portfolio managers Dmitry Khaikin and Deepon Nag. “We also believe the company's technology roadmap remains intact, which should lead to stabilization of market share in the company's core PC and server markets. While both markets remain weak, we believe aging infrastructure and continued growth in IT workloads will trigger a cyclical recovery in both markets, which will have a positive impact on the stock.”

Frequently Asked Questions About Semiconductor Stocks

Semiconductor is a term used to refer to many different types of computer chips. Formally called semiconductor devices, these computer chips use semiconducting materials like silicon and gallium arsenide to process the electrical currents that power our modern computing world. They come in a variety of shapes, sizes, extensions, and configurations, from diodes, transistors, and integrated circuits, to more complex applications like DRAM memory, simple processors, and even GPUs.

First, there are the pure chip design companies, such as Nvidia, AMD, Broadcom, and Qualcomm. These companies use advanced software to design and test chips. Then there are the equipment manufacturers, which provide the machinery needed to manufacture computer chips. These include ASML and Lam Research. Then there are the foundries, which manufacture chips. These include Taiwan Semiconductor and GlobalFoundries. Finally, there are the integrated device manufacturers, which design and also manufacture their own chips in-house. These include Samsung and Intel.

This is the observation that the number of transistors in an integrated circuit doubles every two years. This “law” is named after Gordon Moore, who founded Fairchild Semiconductor and later Intel. The doubling was made possible by the shrinking size of the process nodes or components of computer chips. In 1971, advanced commercial manufacturing reached a width of 10 microns. In 1987, semiconductor technology advanced to a width of 800 nanometers. By 1999, the process moved to 180 nanometers. By 2007, the size had shrunk to 32 nanometers, and in 2022, it is expected to drop to 3 nanometers, which is close to the size of human DNA.

In 2022, the global semiconductor industry generated revenue of just under $600 billion. The industry as a whole shipped 1.15 trillion semiconductor units in 2021. The major countries involved in the semiconductor supply chain are Taiwan, the United States, China, the Netherlands, South Korea, Japan, and Israel.

Intel stock chart

Intel shares have been hovering between $30 and $32 for the past two months, giving both bears and bulls a chance to run.From here, there isn't much resistance until the supply window of $42.50 to $45.

First, INTC needs to reach and close above $34.50. This was the April 25 low after which the stock entered its recent downturn. There is a good chance this will happen this week, as the market loves to fill historic gaps.

The Moving Average Convergence Divergence (MACD) indicator has risen above the zero threshold, which is another bullish signal. Other resistance areas could be at $37 and $40, where the bulls lost steam in 2023.

INTC daily stock chart

  • Intel shares rose about 5% on Monday as attention shifted to its Lunar Lake chips.
  • Clearbridge Large Cap Value Strategy fund drives investment in Intel.
  • Melius Research predicts that the new AI chips will bring Intel back to its roots.
  • Markets were mixed on Friday as traders awaited earnings results.

Intel (INTC) The stock rose more than 5% on Monday as the battered legacy semiconductor is attracting new attention from Wall Street analysts and institutional investors, with the biggest focus being on Intel's upcoming Lunar Lake chips, which should help the company enter the burgeoning AI laptop market.

Stock markets were broadly mixed on Monday afternoon, with many participants awaiting Consumer Price Index (CPI) inflation data on Thursday and second-quarter bank earnings releases on Friday.

Intel stock price news

Melius Research analyst Ben Reitzes recently published a report arguing that Intel is gaining exposure to the AI ​​theme through price-sensitive means. Nvidia (NVDA), Taiwan Semiconductor (TSM) and Super Microcomputer (SMCI) While he has received most of the stock price growth in the AI ​​seat, Reitzes believes a “catch-up” deal would benefit Intel. Apple (AAPL) and Advanced Micro Devices (AMD) It was seen as being left behind in the first half of the year, but recovered in the second half.

“[Microsoft’s delayed AI Recall feature] That should eventually be fixed, and AI-enabled PCs should start featuring Intel's Lunar Lake chips and AMD's Strix Point processors, which should result in big gains by the fourth quarter, Reitzes wrote.

Before the latest rebound that began last week, Intel had fallen 40% heading into the second half of the year and was one of the worst-performing stocks in the entire S&P 500 index over that period. With shares generally cheap, Reitzes expects a “seasonal rebound” to provide relief.

Intel announced its Lunar Lake chips a little over a month ago, but the market has only recently begun to anticipate the chips' potential.

The system-on-chip includes a CPU, integrated GPU, and neural processing unit (NPU), the latter of which gives Lunar Lake chips three times the performance on AI tasks than their predecessor, Meteor Lake chips: Lunar Lake can process 40 Tera Operations per Second (TOPS), four times faster than its predecessor.

Now, Intel says its Lunar Lake chips are 40% faster than Qualcomm's Arm-based Snapdragon X Elite chip, which Microsoft is using in its new Copilot Plus PC. What's more, the company boasts that an entirely new architecture significantly reduces the energy the chips need to operate, and laptops with the chips boast 60% better battery life.

Meanwhile, portfolio managers at the ClearBridge Large Cap Value Strategy fund said they expect Intel's performance to recover in the second half of the year.

“We have a contrarian view on Intel and do not believe the company will be an AI loser. Rather, we see an undervalued opportunity in a company where Intel is strongly positioned as AI-enabled PCs proliferate over the coming quarters,” wrote portfolio managers Dmitry Khaikin and Deepon Nag. “We also believe the company's technology roadmap remains intact, which should lead to stabilization of market share in the company's core PC and server markets. While both markets remain weak, we believe aging infrastructure and continued growth in IT workloads will trigger a cyclical recovery in both markets, which will have a positive impact on the stock.”

Frequently Asked Questions About Semiconductor Stocks

Semiconductor is a term used to refer to many different types of computer chips. Formally called semiconductor devices, these computer chips use semiconducting materials like silicon and gallium arsenide to process the electrical currents that power our modern computing world. They come in a variety of shapes, sizes, extensions, and configurations, from diodes, transistors, and integrated circuits, to more complex applications like DRAM memory, simple processors, and even GPUs.

First, there are the pure chip design companies, such as Nvidia, AMD, Broadcom, and Qualcomm. These companies use advanced software to design and test chips. Then there are the equipment manufacturers, which provide the machinery needed to manufacture computer chips. These include ASML and Lam Research. Then there are the foundries, which manufacture chips. These include Taiwan Semiconductor and GlobalFoundries. Finally, there are the integrated device manufacturers, which design and also manufacture their own chips in-house. These include Samsung and Intel.

This is the observation that the number of transistors in an integrated circuit doubles every two years. This “law” is named after Gordon Moore, who founded Fairchild Semiconductor and later Intel. The doubling was made possible by the shrinking size of the process nodes or components of computer chips. In 1971, advanced commercial manufacturing reached a width of 10 microns. In 1987, semiconductor technology advanced to a width of 800 nanometers. By 1999, the process moved to 180 nanometers. By 2007, the size had shrunk to 32 nanometers, and in 2022, it is expected to drop to 3 nanometers, which is close to the size of human DNA.

In 2022, the global semiconductor industry generated revenue of just under $600 billion. The industry as a whole shipped 1.15 trillion semiconductor units in 2021. The major countries involved in the semiconductor supply chain are Taiwan, the United States, China, the Netherlands, South Korea, Japan, and Israel.

Intel stock chart

Intel shares have been hovering between $30 and $32 for the past two months, giving both bears and bulls a chance to run.From here, there isn't much resistance until the supply window of $42.50 to $45.

First, INTC needs to reach and close above $34.50. This was the April 25 low after which the stock entered its recent downturn. There is a good chance this will happen this week, as the market loves to fill historic gaps.

The Moving Average Convergence Divergence (MACD) indicator has risen above the zero threshold, which is another bullish signal. Other resistance areas could be at $37 and $40, where the bulls lost momentum in 2023.

INTC daily stock chart



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