Intel’s Renaissance in the AI Universe
Intel, known for monopolizing the Central Processing Unit (CPU) market with an iron fist, faced a reckoning over the last few years. Despite losing ground to competitors like Advanced Micro Devices and being abandoned by Apple for their MacBook lineup, Intel’s recent initiatives may signal a resurgence.
Shaking off the cobwebs of complacency, Intel embarked on a transformative journey last June, embracing an internal-foundry model. This strategic shift, aiming for $10 billion in savings by 2025, is intended to revitalize the tech giant’s position in the market.
Amid this revival, Intel directed substantial investments towards AI innovation. Introducing a slew of AI chips in December, such as the Gaudi3 GPU challenging Nvidia’s offerings, Intel also unveiled Core Ultra processors and Xeon server chips featuring neural processing units for enhanced AI program functionality.
While Intel faces a steep climb to reclaim its AI crown, the company’s trajectory hints at a potentially lucrative future for investors.
Amazon’s AI Odyssey
Emerging almost three decades ago, Amazon morphed into a technological juggernaut, spanning sectors from e-commerce to cloud computing and space technology. In the AI arena, Amazon’s prowess shines through its Amazon Web Services (AWS), the world’s premier cloud service.
In a bid to capitalize on the AI boom, AWS unfurled an array of cutting-edge tools. Initiatives like Bedrock for generative AI applications, CodeWhisperer for code generation, and HealthScribe for transcription of medical dialogues highlight Amazon’s relentless push into the AI sphere.
Moreover, Amazon flexed its AI muscle by introducing Rufus, an AI shopping assistant, underscoring the company’s commitment to infusing AI capabilities across its expansive ecosystem.
The fourth quarter of 2023 saw a 13% uptick in AWS revenue, reaching $24 billion year-over-year. Commanding 54% of Amazon’s operating income, AWS exemplifies the pivotal role AI plays in Amazon’s future growth.
Future Earnings and Projections
Forecasts for earnings per share (EPS) point to a promising prognosis for both Intel and Amazon. Intel’s EPS could surge to nearly $3 by fiscal 2026, translating to a potential 120% stock price increase. On the other hand, Amazon’s EPS estimates predict a rise to approximately $7 per share by 2026, signaling a 67% uptick in its stock value.
With these rosy forecasts and the companies’ palpable strides in AI innovation, investing in Intel and Amazon now could be a prudent move, ensuring a shot at potential long-term financial gains.