Could Early SambaNova Talks Reveal a New AI Strategy for Intel (INTC)?

• In recent developments, Intel has entered early discussions to potentially acquire AI chip startup SambaNova Systems, with sources indicating the talks are at a preliminary stage and no deal is certain.
• Reports suggest any acquisition of SambaNova would likely value the startup below the US$5 billion it fetched in its 2021 funding round, highlighting evolving valuations in the AI chip sector.
• We'll explore how these early-stage M&A talks in AI chips could affect Intel's investment narrative and its evolving role in AI innovation.

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Intel Investment Narrative Recap

To be a shareholder in Intel today, you need to believe that Intel can reposition itself as a leader in AI and advanced semiconductor manufacturing, driving growth through innovation and operational efficiency. The recent early-stage talks to potentially acquire SambaNova Systems indicate a continued push into AI, but at this stage, they do not materially impact the current short-term catalyst, which remains Intel’s execution in rolling out next-generation AI-enabled products. The biggest risk continues to be Intel’s ability to execute quickly on its AI and foundry strategies, with organizational complexity and manufacturing constraints as persistent challenges.

Among recent announcements, Intel’s collaboration with TurinTech to deliver the Artemis AI engineering platform optimized for Intel’s Core Ultra processors is highly relevant. This effort highlights Intel’s intent to strengthen its AI portfolio and bring tangible performance improvements across its hardware, which supports its broader catalyst of accelerating AI adoption and capturing new workloads beyond traditional computing.

By contrast, investors should be aware of how Intel’s reliance on older product lines and potential delays in advanced process nodes could present unexpected challenges for the company’s...

Read the full narrative on Intel (it's free!)

Intel's outlook anticipates $58.1 billion in revenue and $5.2 billion in earnings by 2028. This scenario assumes 3.1% annual revenue growth and a $25.7 billion increase in earnings from the current level of -$20.5 billion.

Uncover how Intel's forecasts yield a $28.42 fair value, a 26% downside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were forecasting Intel’s revenue to grow by 5.4 percent annually, with earnings potentially reaching US$8.7 billion by 2028. That outlook emphasizes Intel’s aggressive pivot into full-stack AI and higher-margin foundry services. Compared to the consensus, these analysts focus more on Intel’s ability to quickly adapt and gain manufacturing leadership, so it is worth considering how new developments like the SambaNova talks could shift those expectations.

Explore 29 other fair value estimates on Intel - why the stock might be worth less than half the current price!

Build Your Own Intel Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Intel research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Intel research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Intel's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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