It’s amazing to witness a the resurgence of interest in Intel (NASDAQ:INTC) in late 2023. Earlier this year, INTC stock hit rock bottom as financial traders mocked Intel. They relentlessly talked about Advanced Micro Devices (NASDAQ:AMD) eating Intel’s lunch. But now, Intel’s loyal investors are having the last laugh, and in 2024 I expect that they’ll be laughing all the way to the bank.
It’s not too late to buy Intel stock this year if you don’t already have a position. After all, Intel’s turnaround tale is still in its beginning stages. There’s plenty of room to run, both in December and in the coming year, as Intel potentially goes from most hated to most celebrated.
AI PC Market Growth Could Power an INTC Stock Rally
Besides Advanced Micro Devices taking market share from the company, another problem for Intel this year was the persistently soft demand for personal computers. However, the prospects of a revival look surprisingly good as AI-embedded PCs could bring the PC market back to life in 2024.
The outlook seems fairly positive now, as Intel Chief Commercial Officer Christoph Schell envisions a “significant” refresh opportunity with AI-capable PCs. Investors should be patient, though. As Schell clarifies, he doesn’t anticipate moonshot growth.
“I also know this is a question where a lot of people hope for a hockey stick,” he said. “I don’t think it will be a hockey stick. I think it will take a little bit of time for people to actually understand the use cases.”
It still makes sense to invest today in anticipation of AI PC industry acceleration next year, however. Schell predicts that growth in this field could occur later in 2024.
“If we meet a year from now, the amount of [request-for-quotes] that we would have seen, particularly the second half of next calendar year, in the client commercial space that will have [requested] AI features will be a significant number. That’s my bet,” he said.
It’s a bold bet to make, but if it turns out to be true, then get ready for INTC stock to head higher. I actually wouldn’t rule out the “hockey stick” scenario, even if Schell doesn’t want people to assume it will happen.
What Would Happen if Nvidia Announces a Deal With Intel?
One aspect of Intel’s business model that could generate substantial revenue for the company is its foundry (i.e., microchip manufacturing) division.
As Barron’s pointed out, “Intel announced plans to separate its manufacturing from its design business, with each group getting its own accounting.”
Having a separate, dedicated chip-manufacturing unit could make Intel an attractive target for mutually beneficial collaborations. Indeed, earlier this year, Nvidia (NASDAQ:NVDA) CEO Jensen Huang stated outright that Nvidia was “open to manufacturing with Intel.”
This collaboration hasn’t actually happened yet, but it could be in the works soon. Recently, Nvidia Chief Financial Officer Colette Kress teased the possibility of adding “potentially adding another foundry” company as a partner.
Kress didn’t mention Intel by name in that quote. Still, given Huang’s aforementioned quote, it’s easy to imagine Nvidia announcing a strategic partnership with Intel in the coming months.
This would be a win-win for both companies, but of course, the greater beneficiary would be Intel. Nvidia is the golden child of 2023, and anything it touches will also turn to gold. In that context, just consider how high INTC stock would run if an Nvidia-Intel were to be announced.
Intel Stock’s Upcoming Rally: Are You Ready for It?
Intel stock jumped in November, but the tale of December is still being written. There’s no way to predict what will happen in the coming year.
The coming months could be very exciting, however, if you’re invested in Intel. Soon enough, the days of commentators mocking Intel could be nothing more than a distant memory.
So, what will drive INTC stock higher in 2024? Will it be an AI-powered revival of the PC market? Or, will it be a partnership between Intel and Nvidia? Maybe it will be all of the above. Therefore, I invite you to consider taking a share position in Intel before it goes into “hockey stick” mode.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
