Benzinga - Shares of Intel Corporation (NASDAQ: INTC) rallied on Wednesday, after the company said at the DCAI (data center and AI) investor event that its new server chips will hit the market sooner than expected.
- KeyBanc Capital Markets analyst John Vinh reiterated a Sector Weight rating on the stock.
- Raymond James analyst Srini Pajjuri maintained an Outperform rating, while raising the price target from $33 to $35.
- Oppenheimer analyst Rick Schafer reaffirmed a Perform rating on the stock.
- Bernstein analyst Stacy Rasgon maintained an Underperform rating and price target of $20.
KeyBanc
- “Sapphire Rapids remains on track to ship 1M units by mid-2023,” Vinh said in a note.
- Intel’s AI training and inference strategy showcases “its CPUs/GPUs/accelerators' capabilities, and it sees a $40B+ TAM opportunity by 2027, consisting of $24B from general compute and $16B from accelerated compute, with a majority of opportunities in inference,” the analyst further stated.
- Although Intel’s progress on the ramp of Sapphire Rapids and its product roadmap are encouraging, “we await further proof points on its ability to close the performance gap and regain market share” versus Advanced Micro Devices, Inc. (NASDAQ: AMD), he added.
- “Sapphire Rapids is shipping in volume and management expects Sierra Forest, its next-gen CPU based on Intel 3 process node, to launch in 1H24 (vs prior expectation for 2024),” Pajjuri said. “The energy-efficient Sierra Forest CPU is expected to have industry-leading 144 cores, which should position it well for fast-growing ultra high-density Cloud workloads."
- “Overall, we walked away more optimistic about the company's data center roadmap even as we expect server share losses to continue through the year,” Pajjuri added.
- “Sapphire/Emerald Rapids built on P-Core architecture. 144 core Sierra Forest is the first E-Core Xeon CPU,” Schafer wrote in a note. “Granite Rapids launches next year, shortly after Sierra Forest,” he added.
- “We recognize Intel’s efforts to recover process leadership and build out its own software ecosystem but see management in prove-it mode as multi-year turnaround efforts play out,” the analyst further stated.
- “The tone in general was skewed constructively, with good things to say around Sapphire Rapids uptake, and with new products (Sierra Forest and Granite Rapids) now powered-on and sampling,” Rasgon said.
- “Upticking on long term Datacenter TAM growth, though forecasts appear optimistic, and dominated by accelerators (where the company's position remains weak),” he added.
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