Intel's stock stems its bleeding upon launch of new AI chip

By Emily Bary

The chip maker's shares are on track to snap a five-session losing streak

Can a new artificial-intelligence chip help Intel Corp.'s stock find positive momentum?

At least a little bit, judging by Tuesday's market action. Intel shares (INTC) were down as much as 1.7% earlier in the session and had been on track to suffer their worst six-day performance in about three-and-a-half years - but they turned around after the company made a new chip announcement. The stock was up 0.4% in afternoon trading and on pace to snap a five-session losing streak.

Intel teased its Gaudi 3 accelerator product, which it said gives an average performance boost of 50% for inference applications relative to rival Nvidia Corp.'s (NVDA) H100 accelerator. The chip also has 40% better power efficiency on average relative to the H100, according to Intel, "at a fraction of the cost."

The H100 is an older-model chip in Nvidia's Hopper line, which the company unveiled in 2022. Nvidia announced the H200 last year and showed off its new Blackwell B100 and B200 chips last month.

Don't miss: Nvidia's stock enters a correction. Here's where the other Magnificent Seven stocks stand.

"With only 10% of enterprises successfully moving [generative-AI] projects into production last year, Intel's latest offerings address the challenges businesses face in scaling AI initiatives," Intel said in a release.

Nvidia is far and away the market leader for AI accelerators, but Wall Street has been looking for other companies that stand to capture the rampant spending on AI hardware.

Investors haven't necessarily been sold thus far on Intel's competitive positioning in this market, and its stock has had a rough start to the year. After gaining 90% in 2023, Intel shares are off 24% so far in 2024. That's even as the PHLX Semiconductor Index SOX has gained about 16% on a year-to-date basis.

See also: Intel's stock had its worst week since 2020. Is the selloff justified?

-Emily Bary

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04-09-24 1550ET

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