One of the biggest developments from chipmaker Intel (INTC) in the last few years has been its Gaudi 3 artificial intelligence (AI) accelerator chip. But now, Intel has cut its sales forecast on the new chip.
Media reports suggest that Intel has cut chip shipment targets by more than 30% for 2025. A combination of consumer demand issues coupled with internal adjustments are behind the reduced outlook. Originally, Intel planned to ship between 300,000 and 350,000 Gaudi 3 chips for 2025. Now, that number has been lowered to between 200,000 and 250,000 units.
Part of the problem stems from Intel’s 2019 acquisition of Habana Labs, which has put Intel into a more conservative stance in terms of how much it can produce. Intel is reportedly looking to speed up the timeline for bringing the Gaudi 2 project to a close, and part of that seems to be dialing back how many Gaudi 3’s can be produced.
A Problem Solved
There was a bit of good news out of Intel, as its Raptor Lake processors may have finally seen the end of their problems. Intel noted that the root cause of the processor crashes was an issue of too high voltage going into the processors. With this, Intel’s processors will no suffer damage due to normal operations.
New Pentagon Contract
Some people are wondering if Intel’s latest deal with the Pentagon is making it a better buy target. There are certainly reasons for this as Intel is still a major force in the chip market. It also has landed a large amount of cash from the CHIPS Act, and its share price is comparatively cheap right now. But its lack of growth remains a key concern for potential investors.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and seven Sells assigned in the past three months, as indicated by the graphic below. After a 36.74% loss in its share price over the past year, the average INTC price target of $25.38 per share implies 15.1% upside potential.
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