AI

Intel stock rises amid Amazon, federal deals

Intel stock prices rose this week amid news of deals with Amazon and the federal government, along with aggressive internal changes aiming to reboot the chipmaker's fortunes.

Image: Adobe Stock

September 19, 2024

Intel stock prices rose this week amid news of deals with Amazon and the federal government, along with aggressive internal changes aiming to reboot the chipmaker's fortunes.

AWS deal

Intel also announced its collaboration with Amazon Web Services this week, with the official press release describing the deal as "a co-investment in custom chip designs under a multi-year, multi-billion dollar framework covering product and wafers from Intel." Intel also mentioned AI technologies as part of the strategy behind this deal.

"This expansion of our longtime relationship with AWS reflects the strength of our process technology and delivers differentiated solutions for customer workloads," Pat Gelsinger, CEO at Intel, said in the release. "Intel's chip design and manufacturing capabilities, combined with the comprehensive and broadly adopted cloud, AI and machine learning services of AWS, will unleash innovation across our shared ecosystem and support the growth of both businesses, as well as a sustainable domestic AI supply chain."

"At AWS, we're committed to delivering the most powerful and innovative cloud infrastructure to our customers," Matt Garman, CEO at AWS, said in the release. "By co-developing next-generation AI fabric chips on Intel 18A, we continue our long-standing collaboration, dating back to 2006 when we launched the first Amazon EC2 instance featuring their chips. Our continued collaboration allows us to empower our joint customers with the ability to run any workload and unlock new AI capabilities."

Internal changes and federal funding

Intel is transitioning its foundry business to an independent subsidiary model, according to Investor's Business Daily, along with delaying its Germany and Poland manufacturing plant plans and reducing or closing out two thirds of its retail holdings.

Intel also announced $3 billion in federal funding related to the Chips and Science Act for the Secure Enclave program.

"If there was ever a company and stock in need of some positive news flow it was Intel," Jordan Klein, trading-desk analyst with Mizuho Securities, said in a client note quoted by IBD. "Shares were down 60% year to date and grinding lower and lower vs. (the) semi sector up 34% year to date."

Part of the federal funding strategy involves plans for Intel to develop chips for the U.S. military, according to CNN.