Intel on the rise: New collaboration with Amazon for chip production

Intel was able to post a successful week after mixed performance in August and September. The company recently secured $3 billion from the CHIPS Act and stirred the market again with the announcement of a new partnership with Amazon. These developments caused the stock to rise by 4.4% in a short period. Investors interpret this as a sign that Intel is reinventing itself following a comprehensive restructuring announcement in the second quarter. Already after the market close the previous day, Intel announced an expansion of its strategic collaboration with Amazon Web Services. As part of a multi-year, multi-billion dollar partnership, Intel will produce custom chips for Amazon. These include a specialized AI fabric chip and a Xeon 6 chip designed for compute-intensive AI tasks. This partnership represents a much-needed success for Intel's foundry business. The business has posted billions in losses in recent years and has fallen behind competitors like Taiwan Semiconductor. The AI fabric chip will use Intel’s 18A process, which manufactures nodes as small as 18 angstroms (1.8 nanometers). This success comes immediately on the heels of the CHIPS Act news, representing another significant gain for Intel’s foundry. Despite the positive news, investors should remain cautious. Intel still faces the challenge of implementing new projects on time and cost-efficiently—a area where it has often had issues in the past. Intel remains a crucial player with numerous companies relying on its chip designs and foundry services. A complete turnaround will require more than just successive positive announcements. Intel’s next quarterly report, expected by the end of October, will be of particular interest. While poor numbers are anticipated, the company may provide insights into the progress of its restructuring. Before investing in Intel stocks, you should consider the following: The Motley Fool Stock Advisor team has recently identified what they believe to be the 10 best stocks for investors right now, and Intel was not among them. The 10 chosen stocks could potentially yield extraordinary returns in the coming years.