Intel Stock’s December Surge: A Tripling Triumph

Intel Stock

Throughout 2022 and the first half of 2023, Intel (NASDAQ:INTC) was perceived as an underdog in the chip industry. However, the company has orchestrated a remarkable comeback in the eyes of investors, with its stock outpacing the S&P 500 by nearly threefold in December.

According to data from Yahoo Finance, Intel’s stock surged by 13% in December, while the S&P 500 recorded a 4.5% gain. In contrast, key competitors Nvidia (NASDAQ:NVDA) experienced a 5.3% increase, and AMD (NASDAQ:AMD) shares jumped by 18%. Intel’s year-to-date performance is even more striking, with shares soaring by 91%.

This resurgence is noteworthy, especially considering Intel’s tumultuous 2022 when the stock plummeted by 48% amid disappointing quarterly results and product setbacks. Despite the impressive recovery, Intel’s market capitalization remains below that of its main rivals—standing at $212 billion, compared to AMD’s $231.7 billion and Nvidia’s substantial $1.22 trillion, according to Yahoo Finance.

Several factors contribute to Intel’s strong showing in December:

1. Government Grant for Chip Plant

Israel’s government awarded Intel a substantial $3.2 billion grant for a $25 billion chip plant planned for construction in southern Israel. This investment, part of CEO Pat Gelsinger’s strategy to build new chip plants, is considered the largest ever by a company in Israel. Intel employs 11,700 people in Israel and has invested over $50 billion in the country over the last 50 years.

2. Positive Product Developments

Intel has recently announced significant advancements in its product portfolio. The unveiling of Gaudi3, an artificial intelligence chip for generative AI software, garnered attention. This chip is set to launch next year officially. Additionally, Intel showcased the Core Ultra processor, targeting the emerging AI PC market.

Analysts and investors are optimistic about the impact of these new products on Intel’s sales and profits in 2024, especially amid the ongoing AI boom. JPMorgan analyst Harlan Sur expressed confidence in Intel’s unique position to unlock AI capabilities across various end devices, citing the company’s broad compute product portfolio, software solutions, extensive ecosystem, and R&D scale.

In an interview with Yahoo Finance Live, CEO Pat Gelsinger emphasized Intel’s commitment to dominating the artificial intelligence space. Gelsinger stated that Intel is ramping up production of these new chips aggressively and sees significant market value creation opportunities ahead. He noted that Intel remains undervalued compared to peers and believes there is ample room to create value for customers and shareholders.

Investors are placing their bets on Intel’s resurgence and its potential to capitalize on the growing demand for AI-focused products, making it a compelling player in the market.

Featured Image: Unsplash

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