Shares of Intel Corporation (NASDAQ: INTC) are continuing their impressive ascent, driven by recent developments in the company’s chip manufacturing sector. As of the latest pre-market update, INTC stock has surged 7.75% to $22.53, building on a 6.36% increase from the previous session, which concluded at $20.91.
Intel Formed Significant Partnership with Amazon
The substantial rise in Intel’s stock can be attributed to a newly inked agreement with Amazon’s cloud services unit. The fact that Amazon has chosen the company to produce customized artificial intelligence (AI) chips is a major endorsement of its foundry services.
This collaboration, which is anticipated to cost billions of dollars, highlights INTC’s expanding position in the AI chip industry. In a message to staff members, INTC CEO Pat Gelsinger announced this development and included information on the company’s strategic cost-cutting initiatives.
INTC Advancing Towards Strategic Adjustments
Amazon’s AWS cloud division, already involved in chip design for its data centers, will now rely on Intel to package at least one variant of its new AI chips. The company will utilize its cutting-edge 18A process technology for this purpose. The collaboration is set to expand with additional designs anticipated from Amazon, leveraging INTC’s upcoming 18AP and 14A manufacturing processes.
In response to these developments, Intel has outlined several strategic adjustments. The company is divesting its stake in the programmable chip business Altera and pausing construction on its chip factory projects in Germany and Poland.
Despite these moves, INTC remains committed to its U.S. manufacturing expansion and plans to maintain its foundry operations as a key component of its turnaround strategy. The foundry business will be established as an independent subsidiary with its own operating board, separating its financial performance from Intel’s design business.
Future Directions
Intel (NASDAQ: INTC) is also focused on enhancing the efficiency and profitability of its operations. The company is reorganizing its divisions, including those involved in automotive and edge computing technologies, to better prioritize the core technology of its central processing units (CPUs). These steps are designed to bolster its market competitiveness and drive future growth.
