By Intel, the chip maker, has seen its shares surge following a strong outlook for its December quarter and the announcement of newly signed customers for its foundry business. This news has generated interest among investors, with several key takeaways that can be advantageous, according to Piper Sandler.
Positive Commentary on Key End Markets
Analyst Harsh Kumar, in an Overweight ratings report for Nvidia, Advanced Micro Devices (AMD), and ON Semiconductor (ON), emphasized the significance of Intel’s comments on key end markets. Kumar believes that Intel’s disclosure regarding healthy inventory levels for consumer and enterprise PCs could bode well for AMD’s business. As the only other major participant in the PC processor market, Kumar suggests that AMD stands to benefit from the broad PC market normalizing.
High Demand for AI Chips
Intel’s optimistic outlook extends to the demand for AI chips. The chip maker stated that it is currently supply-constrained for its Gaudi AI products, with order pipelines doubling over the past three months. This positive development is good news for both Nvidia and AMD, as they are also players in the AI semiconductor space. Kumar particularly highlights the potential for AMD’s upcoming MI300 launch and emphasizes that the demand for AI chips is currently outstripping supply.
Strong Demand from Auto Companies
Another area of strength noted by Intel is the strong demand from auto companies. This aligns with earlier statements made by Texas Instruments, which emphasized solid order growth in the auto market. As ON Semiconductor has significant exposure to autos, Kumar suggests it may also outperform based on this positive trend.
Potential Gains for Investors
Kumar has set price targets that indicate substantial potential gains for Nvidia ($620), AMD ($150), and ON Semiconductor ($135). With Nvidia’s stock rising by 1.1% to $407.75, AMD’s shares climbing 2.9% to $96.36, and ON Semiconductor’s stock increasing by 1.2% to $83.74 in Friday’s trading, investor confidence seems to be on the upswing.
Intel’s stock particularly experienced a significant surge, increasing by 10% to reach $35.88.
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