A much discussed area in technology these days is artificial intelligence, a type of machine learning. Artificial intelligence is a workload that requires an immense amount of processing power, which is why companies like microprocessor giant Intel (NASDAQ: INTC) -- a company that brings in tens of billions of dollars from sales of processors -- see this market as an interesting long-term growth opportunity.
Interestingly, although Intel is a major supplier of processors for artificial intelligence workloads, the company doesn't get nearly as much attention for its efforts in this market as does graphics specialist NVIDIA (NASDAQ: NVDA) -- a company that has seen significant revenue and profit growth from artificial intelligence applications as its long-term investments in this space are paying off.
Look at the slide above and you'll notice Intel has different solutions for different types of workloads. It's promoting its next-generation Xeon processor (known as Skylake-EP) as the standard, general-purpose artificial intelligence processor.
From there, the offerings get more targeted. For some workloads, it will offer a specialized version of its Xeon Phi processor called Knights Mill. For others, it's going to offer combined Xeon processor with Field Programmable Gate Array (FPGA) chips. And, for still others, the company plans to offer a chip that combines a Xeon processor with a specialized deep learning chip called Lake Crest (based on technology that Intel acquired when it picked up start-up Nervana Systems).
Intel's position looks good
Intel's strategy looks as solid as it can possibly be as it seems to be throwing its entire technical arsenal at the problem -- I'd say the company is well positioned to profit from the continued proliferation of artificial intelligence workloads.
What will only become evidence in time, though, will be how much market share Intel will ultimately be able to capture in this market. The underlying market growth should mean that Intel's revenue and profits here will grow, but obviously, the magnitude of that growth will depend on its ability to defend its market share while at the same time defending its average selling prices.
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