<p>A shift is happening in the artificial intelligence (AI) computing space. Hyperscalers and AI companies are transitioning from training large language models to putting those models to work on real-world data to unlock the productivity gains that this technology promises.</p>
<p>A lot of money has been spent on data center infrastructure that's optimized to train models using large datasets. Inference, on the other hand, doesn't require as much parallel-processing power as the training phase, as it needs to act on specific inputs to respond to queries in real time. However, Deloitte estimates that rising inference workloads will create demand for more computing power.</p>
<p>The consulting giant estimates that inference workloads will consume two-thirds of all AI computing power in 2026, up from 50% last year. This will create a need for more AI chips of the varieties that are best for inference. That's great news for <strong>Intel</strong> <span class="ticker-mention inline-flex items-center font-bold">(INTC <span class="ml-1 text-green-900">+4.36%</span>)</span> investors. In fact, it won't be surprising to see Intel eclipsing the likes of <strong>Nvidia</strong> and <strong>Broadcom</strong> <span class="ticker-mention inline-flex items-center font-bold">(AVGO <span class="ml-1 text-red-900">0.52%</span>)</span> in the AI inference era.</p>
<div class="image"><img alt="Intel logo inside a building." width="880" height="528" class="h-auto max-w-full rounded object-contain" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Njg2ODkvaW5zaWRlLWludGVsLWJ1aWxkaW5nLXdpdGgtaW50ZWwtbG9nby1pbi12aWV3X2ludGVsLmpwZyZ3PTM4NDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84Njg2ODkvaW5zaWRlLWludGVsLWJ1aWxkaW5nLXdpdGgtaW50ZWwtbG9nby1pbi12aWV3X2ludGVsLmpwZyZ3PTM4NDA"/>
<p>Image source: Intel</p>
</div>
<h2>AI inference demand has given Intel a big shot in the arm</h2>
<p>The different computing demands of AI inference explain the strong demand for chips designed specifically for these tasks. Application-specific integrated circuits (ASICs), for instance, have been in healthy demand from hyperscalers and AI companies because of the advantages they can offer over general-purpose parallel processors such as graphics processing units.</p><div class="my-8 lg:hidden"><div id="foolcom_sidebar_top_container" class="pitch-container"></div></div>
<section><div class="flex flex-wrap place-content-between"><div class="flex w-full place-items-center lg:w-3/4"><div class="p-[8px] text-center" style="width: 95px"><small><div class="flex flex-col items-center gap-2">Expand</div></small></div><div class="py-4 pr-4"><img alt="Intel Stock Quote" width="64" height="64" class="w-full flex-none object-contain" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0lOVEMucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0lOVEMucG5nJnc9MTI4"/></div><div class="pr-[16px]"><h2>NASDAQ: INTC</h2><div class="text-md leading-[1] font-medium text-gray-800">Intel</div></div></div><div class="flex w-full place-items-center lg:w-1/4"><div class="h-full w-5/6 px-4 py-2.5 lg:text-right bg-green-200"><div class="mb-[2px] text-[10px] text-gray-800">Today's Change</div><div class="mb-6 text-[18px] leading-none font-medium text-green-900">(4.36%) $4.71</div><div class="mb-[2px] text-[10px] text-gray-800">Current Price</div><div class="text-gray-1100 text-[18px] leading-none font-medium">$112.86</div></div><div class="flex h-full w-1/6 items-center justify-center py-2.5 bg-green-900"></div></div></div><div class="flex flex-wrap overflow-hidden transition-all duration-300 h-0"><div class="w-full border-t border-gray-300 p-2 lg:w-3/4 lg:border-r lg:p-6"></div><div class="w-full p-2 lg:w-1/4 lg:p-4"><h3>Key Data Points</h3><div class="text-gray-1100 my-[14px] grid grid-cols-2 text-sm"><div class="border-b border-gray-300 py-[14px] text-gray-800">Market Cap</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$568B</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Day's Range</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$106.59 - $113.50</div><div class="border-b border-gray-300 py-[14px] text-gray-800">52wk Range</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">$18.96 - $113.50</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Volume</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">5.7M</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Avg Vol</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">107M</div><div class="border-b border-gray-300 py-[14px] text-gray-800">Gross Margin</div><div class="border-b border-gray-300 py-[14px] text-right font-bold">35.90%</div></div></div></div></section>
<p>ASICs are more power efficient, and they help reduce overall computational costs when they are handling the highly specific tasks that they are designed to. This explains why Broadcom, the biggest player in the ASIC market (with an estimated 60% market share) is forecasting a huge increase in its AI revenue.</p><div class="mb-8 flex justify-center"></div>
<p>The company is confident it will exceed $100 billion in AI chip revenue in 2027, a huge jump from last year's $20 billion. Even Nvidia is gearing up its upcoming Vera Rubin processors for inference-focused tasks, promising significant reductions in inference costs. However, I believe that investing in Intel could be one of the best ways to capitalize on the growing demand for AI inference chips.</p><div><div id="in_line_article_pitch_container" class="pitch-container"></div></div>
<p>That's because the company is the dominant player in the server central processing unit (CPU) market, with a share of just over 71%. Moreover, Intel is cutting its teeth in the ASIC market as well. Its ASIC revenuealmost doubled year over year in the first quarter, while sequential growth was 30%.</p>
<p>For comparison, Intel's custom ASIC revenue was up by 50% year over year in the fourth quarter of 2025, while sequential growth was 26%. Clearly, Intel has seen a significant acceleration in its ASIC sales lately, and the business now has an annual run rate of more than $1 billion. It won't be surprising to see further acceleration in this business, as hyperscalers and chip companies have lately signed multiple contracts for Intel's custom AI chips and server CPUs.</p>
<p><strong>Alphabet</strong>'s Google, for instance, has a multiyear contract with Intel to deploy Intel's ASICs and Xeon server CPUs. Even Nvidia is integrating Intel's Xeon server CPUs into its Rubin rack-scale server systems. In all, AI inference seems to be heralding a new era of growth for Intel.</p>
<p>CEO Lip-Bu Tan's remarks on the latest earnings call make it clear why the company is well-placed for further growth in the inference era. He noted:</p>
<blockquote>
<p>Artificial intelligence is now moving into the real world toward more distributed inference and reinforcement learning workloads, like agentic, physical AI, robots, and edge AI.</p>
<p>This shift is now beginning to show up in our results, and I want to spend some time on this today. For the last few years, the story around high performance computing was almost exclusively about GPUs and other accelerators. In recent months, we have seen clear signs that the CPU is reinserting itself as the indispensable foundation of the AI era.</p>
</blockquote>
<p>Market research company Futurum estimates that the market for CPUs in AI data centers could increase at an annualized rate of 28% through 2028, though it wouldn't be surprising to see their sales increase at a faster pace because of the boom in AI inference demand.</p>
<h2>Chipzilla's improving growth prospects point toward a bright future</h2>
<p>Intel started turning its business around last year, and those efforts are bearing fruit in 2026. While the company's revenue remained almost flat at $53 billion in 2025, analysts anticipate consistent double-digit percentage growth over the next three years.</p>
<p></p>
<p>INTC Revenue Estimates for Current Fiscal Year data by YCharts.</p>
<p>However, Intel can surpass those expectations, driven by the company's focus on enhancing its manufacturing capacity, boosting production yields of its advanced process nodes, and the lucrative partnerships it is striking in the AI chip space. Stronger-than-expected growth could lead investors to reward Intel stock with a premium valuation, as compared to the 8.7 times sales it trades at right now.</p>
<p>That sales multiple is slightly higher than the U.S. tech sector's average of 7, but it isn't all that expensive. Assuming Intel trades at 10 times sales and achieves $71 billion in revenue in 2028, its market cap would reach $710 billion. That would be an upside of 48% from current levels. Don't be surprised to see this AI stock deliver bigger gains, however, as the demand for its chips is exceeding supply, suggesting that it could indeed grow at a faster pace than analysts are anticipating.</p><div id="article_pitch_container" class="pitch-container"></div><div id="promobox_container" class="pitch-container"></div>

Anthropic drops new AI agent capabilities. GPT-5.5 Instant goes live in 2 days. The AI wave is surging again — who rides it highest?

<p>Anthropic drops new AI agent capabilities. GPT-5.5 Instant goes live in 2 days. The AI wave is surging again — who rides it highest?</p>

AI Race Heats Up! Anthropic & OpenAI Double Down on the Arms Race

04335

INTC

NVDA

<p>Intel is poised to become a major player in the AI inference market, as demand for specialized chips grows. Deloitte predicts that inference workloads will consume two-thirds of AI computing power by 2026. Intel, with a 71% share in the server CPU market, is also seeing significant growth in its ASIC revenue, which nearly doubled year-over-year. Partnerships with companies like Google and Nvidia further position Intel for success in this evolving landscape. Analysts expect Intel's revenue to grow consistently over the next three years, driven by increased manufacturing capacity and strategic partnerships.</p>

- A transition in the AI computing space is shifting focus from training large language models to leveraging them for real-world applications, with inference workloads projected to consume two-thirds of AI computing power by 2026.  
- This increase in demand for specific AI chips, such as ASICs, is generating significant growth potential for Intel, whose revenue from custom ASICs has been rapidly increasing.  
- Intel's enhanced manufacturing capacity and strategic partnerships are expected to drive revenue growth, with the possibility of exceeding analyst expectations in the burgeoning AI inference market.

Motley Fool

INTEL-T

Intel

NVIDIA

Broadcom

China Southern CSI Semiconductor Industry Custom ETF

Guotai CSI Semiconductor Material Equipment Theme ETF

Invesco Semiconductors ETF

iShares Semiconductor ETF

GraniteShares 2x Long INTC Daily ETF

T-Rex 2X Long NVIDIA Daily Target ETF

ChinaAMC Guozheng Semiconductor Chip ETF

GTJA Allianz CSI All Share Semiconductors & Semiconductor Equipment ETF

SPDR S&P Semicon

Guotai CES Semiconductor Chip Industry ETF

VanEck Semiconductor ETF

GTJA Allianz SSE STAR Chip Design Thematic ETF

Direxion Semicon Bull 3X

ChinaAMC SSE STAR Semiconductor Material & Equipment Thematic ETF

Alphabet

Alphabet - C

NVIDIA Corporation

Not Nvidia. Not Broadcom. Intel Is Going to Be the Biggest Winner of the Artificial Intelligence (AI) Inference Era.