Intel is exhibiting enhancements, however AI setup stays a ‘mixed story,’ analyst says

“Intel may have gained some desktop and laptop share, given a more competitive lineup with Raptor Lake/Alder Lake” processors, he wrote in a word to purchasers Wednesday.

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Additionally, the corporate “may be bouncing off the bottom” in its data-center and AI enterprise, provided that its Sapphire Rapids providing is “finally” ramping up, in line with Rolland.

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Though Rolland boosted his worth goal on Intel shares to $35 from $33 Wednesday, he maintained a impartial ranking, expressing concern concerning the firm’s positioning on the planet of AI.

AI seems to be a “mixed story” for Intel, in his view. Sapphire Rapids would possibly supply some near-term advantages, however Rolland worries that capital-expenditure budgets for central processing models (CPUs), that are Intel’s bread and butter, might come below stress as firms look to spend extra on graphics processing models (GPUs) that may assist with AI duties.

“Without meaningful hyperscale capex increases this quarter, we fear AI server GPU purchasing could crowd out wallet share for CPUs and storage product,” he wrote.

Read: Amazon, Microsoft and Google cloud providers wager closely on AI, however do their clients even need it?

That mentioned, Intel faces a “lowered bar” heading into its July 27 report, Rolland added, as shares have superior solely about half as a lot because the PHLX Semiconductor Index
SOX,
-0.31%
for the reason that firm final delivered outcomes.