July 9, 2024 - $Intel (INTC.US)$shares rose 3.80% to $35.280 in pre-market trading on Tuesday.

In a recent report by Melius Research, analyst Ben Reitzes argued that Intel offers a price-conscious means of gaining exposure to the AI theme. Despite Nvidia, TSMC, and Super Micro Computer reaping significant stock gains for their roles in AI, Reitzes believes that a “catch-up” trade would benefit Intel, Apple and Advanced Micro Devices in the second half of the year after being perceived as left behind in the first half.

“[Microsoft’s delayed AI Recall feature] should eventually be fixed, so AI ready PCs should get going with the Lunar Lake chip from Intel and Strix Point processor from AMD — resulting in a big lift by” the fourth quarter, wrote Reitzes.

Intel, having experienced a 40% decline heading into the latter half of the year before its rebound that commenced last week, ranked among the poorest performers in the S&P 500 during that time frame. Due to its overall low valuation, Reitzes anticipates that a "seasonal bounce" will provide a lift.

Intel has launched a new Core Ultra processor that integrates a dedicated Neural Processing Unit (NPU) for AI-specific inference task acceleration with an Arc GPU into the CPU. The NPU is specifically designed for AI inference task acceleration, making this integrated CPU+NPU+GPU processor the company's "most efficient processor" to date, signifying the official arrival of the AI PC era. Intel's Lunar Lake processor for laptops is scheduled to hit the market in the second half of 2024, featuring "a brand-new low-power architecture and significant IPC (Instructions Per Cycle) improvements." The AI data processing capabilities of the GPU and NPU modules in this chip are three times higher than those of the Meteor Lake.