Intel is a contrarian choice.
How will the AI industry evolve in the coming years? That’s the trillion dollar question. Tech giants are building massive AI data centers on the assumption that greater computing power will be needed to train and run future AI models. Meanwhile, AI has become capable of addressing a wide range of use cases, from writing computer code to conducting in-depth research.
Image source: Intel.
This may seem surprising, but Intel (INTC 0.95%) This may be the smartest AI stock to buy right now if you have $1,000. Here’s why.
Two ways to win
Intel has already failed to gain traction in the AI training market, where NvidiaPowerful data center GPUs dominate. However, the company has two distinct ways to benefit from the AI boom, depending on the direction of the industry.
If AI continues to happen primarily in cloud data centers, Intel’s foundry business can play a key role in producing the massive number of AI chips needed to meet demand. The company has been slow to gain foundry customers, but that could change as the Intel 18A process accelerates and the Intel 14A process prepares for a 2027 launch. Intel is ahead of the industry in several ways, including using rear power delivery for the Intel 18A and EUV High-NA lithography for the Intel 14A.
Here’s another possibility: AI inference, the act of running AI models, is largely moving to devices like PCs. Today, AI coding tools interface with AI models running in the cloud, incurring ongoing costs. As PCs gain more powerful AI processors and more memory, it’s only a matter of time before a capable AI coding tool can run entirely locally.
Today’s change
(-0.95%) $-0.35
Current price
$36.95
Key Data Points
Market capitalization
$176 billion
Daily scope
$36.88 -$37.58
52 week range
$17.66 -$44.02
Volume
1.4M
Average flight
92M
Gross margin
35.58%
Intel’s upcoming Panther Lake processor family is expected to include increased AI processing power, but it will likely be years before a powerful AI model can run on a laptop. Still, that day will come someday, and Intel could be a key enabler. Even if the AI data center boom peters out, Intel’s PC business could be a big AI winner in the long run.
This may seem contrarian, but don’t count Intel out in the AI race.
