Intel stock up 25% in last 5 days, on CPU demand as AI agents gain traction

Intel (INTC) shares surged 25% in the span of just five days as the semiconductor sector reaps rewards from the soaring AI industry and burgeoning interest in agentic AI across both enterprise and consumer arenas. On Tuesday morning, Intel's stock price had already jumped 25% on the day. Last week, Intel CEO Lip-Bu Tan emphasized during an appearance at the AI Infra Summit that CPUs are in great demand due to reinforcement learning, agentic AI, system-level orchestration, and their versatile use cases.

CPUs have become indispensable in AI data centers, once considered secondary to graphics processing units (GPUs) responsible for training and running AI models. However, with the rise of AI agents, CPUs have gained newfound significance. This is because GPUs handle AI models that power agents, while CPUs facilitate agents in executing tasks like web navigation and online shopping.

Meta's Muse AI agent, which has garnered significant attention, has seen a rapid uptake, with Sensor Tower reporting an astounding 2.5 million downloads since its launch on September 8. Intel is also rumored to be considering a 10% price hike for its CPUs, as per Digitimes. Intel is currently embarking on a significant turnaround, aiming to regain its position as a leader in the advanced semiconductor space.

The company is also setting out to establish a third-party chip manufacturing business that would compete directly with Taiwan Semiconductor Manufacturing Company (TSMC). In June, The Information disclosed that Google had chosen Intel to manufacture its custom Tensor Processing Units. Nvidia is also considering Intel as a secondary chip supplier.

More recently, Reuters reported that SK Hynix is in discussions with Intel to produce memory chips for the semiconductor fabricator. Intel's stock has been on an upward trajectory over the past five months, climbing 159% and outperforming Nvidia's 49% growth during the same period. Although rival AMD (AMD) also experienced growth, rising 180% over the five-month span.

Over the past year, Intel's stock has increased by 314%, whereas AMD's growth stood at 293%. Nvidia, however, has seen a 29% increase over the same period.