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Intel (INTC) Debuts Integrated OCI Chiplet: Should You Buy?
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Redefining the sector dynamics, Intel Corporation (INTC - Free Report) recently showcased the industry’s first fully integrated optical compute interconnect (OCI) chiplet, marking a significant step forward in high-speed data transmission. Co-packaged with next-generation CPU, GPU, IPU and other Systems-On-Chip, the chiplet is likely to pave the way for emerging AI infrastructure for data centers and high-performance computing applications.
Leveraging Intel’s silicon photonics technology and integrating a silicon photonics integrated circuit (which includes on-chip lasers and optical amplifiers) with an electrical integrated circuit, the OCI chiplet promises to deliver higher bandwidth with lower power consumption and longer reach.
Scaling High-Performance AI Infrastructure
With the proliferation of AI-based applications and generative AI tools, business enterprises are being increasingly forced to scale future computing platforms to address the burgeoning AI workloads. This, in turn, is leading to an exponential growth in I/O bandwidth and longer reach to support larger processing unit (CPU/GPU/IPU) clusters and architectures with more efficient resource utilization. This is where Intel’s OCI chiplet comes to the fore.
Designed to support 64 channels of 32 gigabits per second (Gbps) data transmission in each direction on up to 100 meters of fiber optics, the OCI chiplet enables future scalability of CPU/GPU cluster connectivity and novel computing architectures, including coherent memory expansion and resource disaggregation. Boasting high power efficiency and low latency, it offers an ideal solution for data centers and high-performance computing environments.
Making Inroads With AI Chips
In late 2023, Intel launched AI chips for data centers and PCs. This marked one of the largest architectural shifts for the company in 40 years. The strategic decision was primarily aimed at gaining a firmer footing in the expansive AI sector, spanning cloud and enterprise servers to networks, volume clients and ubiquitous edge environments, in tune with the evolving market dynamics.
Introducing AI in PCs and Edge Devices
Intel is scaling its AI footprint to edge devices and PCs with its Core Ultra processors, supporting more than 100 software vendors and 300 AI models. The new Lunar Lake architecture, featuring advanced graphics and AI processing power, promises significant performance and energy efficiency improvements.
The company has also introduced the Intel Gaudi 3 accelerator and a suite of open, scalable systems for AI adoption across various sectors. Equipped with up to tens of thousands of accelerators interconnected through Ethernet, the Gaudi 3 accelerator promises a substantial boost in AI training and inference capabilities, enabling global enterprises to deploy AI at scale with ease.
Additionally, Intel's updates on next-generation products across all segments of enterprise AI, including the new Intel Xeon 6 processors and Intel Core Ultra client processors, further solidify its position as a frontrunner in the AI revolution. With a projected shipment of 40 million AI PCs in 2024 and a roadmap focused on delivering enhanced performance and capabilities, Intel is poised to shape the future of AI-driven computing.
Down But Not Out
Despite the healthy AI traction, Intel is witnessing intensifying competition in the server, storage and networking markets from its rivals like Advanced Micro Devices, Inc. (AMD - Free Report) , Arm Holdings plc (ARM - Free Report) and NVIDIA Corporation (NVDA - Free Report) .
INTC Underperforms Peers, Subindustry
In addition to the fall in market share, the company has underperformed its peer group over the past year. The stock has lost 7.9% in the past year against the industry’s growth of 142.4%.
Image Source: Zacks Investment Research
INTC Estimate Movement
Earnings estimates for Intel for 2024 have moved down from $1.12 to $1.05 over the past 60 days, while the same for 2025 has declined from $1.89 to $1.86.
Image Source: Zacks Investment Research
INTC Trading Close to 50-Day Moving Average
Intel is currently trading just below the 50-day moving average. It is also trading close to its 52-week low of $29.73.
Image Source: Zacks Investment Research
End Note
Intel's innovative AI solutions hold immense promise for the broader semiconductor ecosystem. By addressing the challenges of scalability, performance and interoperability, it is paving the way for widespread AI adoption across enterprises worldwide.
However, with a Zacks Rank #4 (Sell), it appears that the recent product launches are “too little too late” for Intel. With declining earnings estimates and abysmal price performance compared with its peers, the stock is witnessing a negative investor perception. Consequently, it might not be a prudent investment decision to bet on the stock at the moment.
Image: Bigstock
Intel (INTC) Debuts Integrated OCI Chiplet: Should You Buy?
Redefining the sector dynamics, Intel Corporation (INTC - Free Report) recently showcased the industry’s first fully integrated optical compute interconnect (OCI) chiplet, marking a significant step forward in high-speed data transmission. Co-packaged with next-generation CPU, GPU, IPU and other Systems-On-Chip, the chiplet is likely to pave the way for emerging AI infrastructure for data centers and high-performance computing applications.
Leveraging Intel’s silicon photonics technology and integrating a silicon photonics integrated circuit (which includes on-chip lasers and optical amplifiers) with an electrical integrated circuit, the OCI chiplet promises to deliver higher bandwidth with lower power consumption and longer reach.
Scaling High-Performance AI Infrastructure
With the proliferation of AI-based applications and generative AI tools, business enterprises are being increasingly forced to scale future computing platforms to address the burgeoning AI workloads. This, in turn, is leading to an exponential growth in I/O bandwidth and longer reach to support larger processing unit (CPU/GPU/IPU) clusters and architectures with more efficient resource utilization. This is where Intel’s OCI chiplet comes to the fore.
Designed to support 64 channels of 32 gigabits per second (Gbps) data transmission in each direction on up to 100 meters of fiber optics, the OCI chiplet enables future scalability of CPU/GPU cluster connectivity and novel computing architectures, including coherent memory expansion and resource disaggregation. Boasting high power efficiency and low latency, it offers an ideal solution for data centers and high-performance computing environments.
Making Inroads With AI Chips
In late 2023, Intel launched AI chips for data centers and PCs. This marked one of the largest architectural shifts for the company in 40 years. The strategic decision was primarily aimed at gaining a firmer footing in the expansive AI sector, spanning cloud and enterprise servers to networks, volume clients and ubiquitous edge environments, in tune with the evolving market dynamics.
Introducing AI in PCs and Edge Devices
Intel is scaling its AI footprint to edge devices and PCs with its Core Ultra processors, supporting more than 100 software vendors and 300 AI models. The new Lunar Lake architecture, featuring advanced graphics and AI processing power, promises significant performance and energy efficiency improvements.
The company has also introduced the Intel Gaudi 3 accelerator and a suite of open, scalable systems for AI adoption across various sectors. Equipped with up to tens of thousands of accelerators interconnected through Ethernet, the Gaudi 3 accelerator promises a substantial boost in AI training and inference capabilities, enabling global enterprises to deploy AI at scale with ease.
Additionally, Intel's updates on next-generation products across all segments of enterprise AI, including the new Intel Xeon 6 processors and Intel Core Ultra client processors, further solidify its position as a frontrunner in the AI revolution. With a projected shipment of 40 million AI PCs in 2024 and a roadmap focused on delivering enhanced performance and capabilities, Intel is poised to shape the future of AI-driven computing.
Down But Not Out
Despite the healthy AI traction, Intel is witnessing intensifying competition in the server, storage and networking markets from its rivals like Advanced Micro Devices, Inc. (AMD - Free Report) , Arm Holdings plc (ARM - Free Report) and NVIDIA Corporation (NVDA - Free Report) .
INTC Underperforms Peers, Subindustry
In addition to the fall in market share, the company has underperformed its peer group over the past year. The stock has lost 7.9% in the past year against the industry’s growth of 142.4%.
Image Source: Zacks Investment Research
INTC Estimate Movement
Earnings estimates for Intel for 2024 have moved down from $1.12 to $1.05 over the past 60 days, while the same for 2025 has declined from $1.89 to $1.86.
Image Source: Zacks Investment Research
INTC Trading Close to 50-Day Moving Average
Intel is currently trading just below the 50-day moving average. It is also trading close to its 52-week low of $29.73.
Image Source: Zacks Investment Research
End Note
Intel's innovative AI solutions hold immense promise for the broader semiconductor ecosystem. By addressing the challenges of scalability, performance and interoperability, it is paving the way for widespread AI adoption across enterprises worldwide.
However, with a Zacks Rank #4 (Sell), it appears that the recent product launches are “too little too late” for Intel. With declining earnings estimates and abysmal price performance compared with its peers, the stock is witnessing a negative investor perception. Consequently, it might not be a prudent investment decision to bet on the stock at the moment.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.