Intel Corp (NASDAQ:INTC) stock was trending on Tuesday following the announcement of a collaboration with SoftBank Group Corp’s (OTC:SFTBY) subsidiary, Saimemory.
The partnership aims to advance next-generation memory technology, addressing the growing demands of artificial intelligence and high-performance computing.
The collaboration, called the “Z-Angle Memory program” (ZAM), will focus on developing memory technologies to support AI and computing advancements.
Prototypes are expected by 2027, with full commercialization slated for 2030.
The ZAM initiative will leverage Intel’s expertise in memory technology, particularly from the U.S. Department of Energy’s Advanced Memory Technology program.
This program has worked on improving the performance and power efficiency of next-generation DRAM for computers and servers.
Intel’s Memory Architecture Aims to Address AI Demand
As AI-related memory demand surges, this partnership aims to address the supply shortages, focusing on energy-efficient solutions to meet the computing industry’s needs.
Intel’s new memory architecture and assembly approach are designed to improve performance while reducing power usage and costs, paving the way for broader adoption in the next decade.
Intel’s Mixed Fourth-Quarter Results
Intel reported mixed fourth-quarter results on January 22, exceeding profit expectations but projecting weaker near-term revenue and flat earnings.
This highlighted the uneven progress of Intel’s turnaround, with supply constraints and margin pressures impacting its outlook, leading to a sharp drop in stock price.
The company posted $13.67 billion in revenue, surpassing the $13.37 billion consensus, while adjusted earnings were 15 cents per share, beating expectations of 8 cents.
However, revenue fell 4% year-over-year, with Data Center and AI growth partially offset by weakness in the Client Computing Group.
For the first quarter, Intel forecasted revenue between $11.7 billion and $12.7 billion, below the $12.49 billion consensus, and predicted breakeven adjusted earnings, rather than the modest profit analysts had expected.
Analyst Take
Needham analyst N. Quinn Bolton pointed out that chip supply issues, particularly with Intel 10 and 7, continue to limit shipment volumes, with the tightest supply affecting these key areas.
Bolton also mentioned that Intel’s adjusted gross margin was set to be 34.5% at the midpoint, impacted by a less favorable product mix.
Benchmark analyst Cody Acree viewed the stock pullback as a result of cautious guidance despite a strong quarter, noting that Intel is in the midst of a major transition with milestones like the 18A process and the early Core Ultra Series 3 launch.
JP Morgan analyst Harlan Sur attributed the weak guidance to continued wafer capacity constraints, especially on Intel 10 and 7, and an unfavorable product mix.
Sur expects Intel to streamline its server roadmap to compete with Advanced Micro Devices, Inc (NASDAQ:AMD), and emphasized that demand for Data Center and AI would drive growth despite a decline in PC shipments.
INTC Price Action: Intel shares were up 0.45% at $49.03 at the time of publication on Tuesday, according to Benzinga Pro data.
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