Semiconductor companies have been on a tear. Part of their rally is driven by anything related to AI. But another part is the announcement of new chips that can truly expand on the breakthroughs occurring in AI today.
Part of that could mean that some lagging companies may end up grabbing more market share. And that slower-growing companies out of the market’s favor may become the new market leaders in the quarters ahead.
For instance, Intel (INTC) has struggled in recent years. It’s long underperformed in the industry. But the company’s push for personal computer (PC) chips that can enable AI could be a game changer.
Intel just unveiled details on its Lunar Lake models, which will start debuting in the third quarter.
Intel shares have traded flat over the past year, but a win with PC AI chips could mean the company starts to attract big market interest.
Action to take: With shares at a 52-week low, Intel looks like a contrarian play in the AI space. If the new chips are successful, it could mean a big move higher for shares. Today’s investors may like a position in the AI chip space.
For traders, the August $35 calls, last trading for about $0.66, could see mid-to-high double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.