Intel Stock (NASDAQ:INTC) Blasts Up With SambaNova Deal

Chip stock Intel INTC +6.33% ▲ has been pursuing an acquisition of SambaNova for some time now, even though the deal has been considered somewhat controversial due to CEO Lip-Bu Tan’s involvement with it. But the deal that ultimately emerged was not a buyout, but rather, a partnership. And investors were quite pleased with the outcome. Given that Intel stock was up nearly 6% in Tuesday afternoon’s trading, that should tell you just how pleased shareholders were.

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Instead of Intel buying SambaNova, Intel is instead going to join in a funding round for the company that looks to raise $350 million. Meanwhile, SambaNova will adopt Intel chips and hardware for use in its operations. This is a huge move, because for years, Nvidia NVDA +0.66% ▲ hardware was generally where AI development operations turned for the necessary infrastructure to carry out development.

And having SambaNova in Intel’s corner should help Intel just as much as Intel’s cash will help SambaNova. SambaNova is working on a new chip called the SN50, which actually beats Nvidia’s chips in several benchmarks. Moreover, the SN50 can be connected together with others, building a network of up to 256 processors.

P-Cores? E-Cores? No More.

Meanwhile, Intel also made a move to simplify its core development operations, removing P-Cores and E-Cores from the picture in favor of a unified core development system. Starting with the Alder Lake lineup, reports note, Intel offered “hybrid” core processors that brought together the Golden Cove performance cores and the Gracemont efficiency cores, the P-cores and E-Cores.

While separating the two did have positive results for Intel, simplification—using a proper means to separate products like smaller cache capacity—could have some positive results as well. However, under normal circumstances, processes like these take years to accomplish. Still, reports suggest we will start seeing this consolidation by the end of the decade.

Is Intel a Buy, Hold or Sell?

Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on eight Buys, 21 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 89.78% rally in its share price over the past year, the average INTC price target of $48.21 per share implies 3.9% upside potential.

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