Intel Introduces New Xeon Processors and Gaudi AI Accelerators

In a move to recapture data center market share, Intel launched its next-generation Xeon server processors and revealed competitive pricing for its Gaudi 3 artificial intelligence accelerator chips. These announcements target key areas where Intel has faced pressure from rival Advanced Micro Devices (AMD).

Regaining Data Center Dominance

The sixth-generation Xeon chips are critical for Intel, as they aim to reverse a steady decline in data center market share. Data from Mercury Research shows Intel's hold on the x86 chip market has shrunk by 5.6 percentage points to 76.4% over the past year, with AMD gaining ground at 23.6%.

Manufacturing stumbles by Intel have created opportunities for AMD, which leverages Taiwan Semiconductor Manufacturing Company's (TSMC) advanced fabrication technology.

Xeon 6: Efficiency and Performance

The Xeon 6 server processors come in two variants: a high-performance model and an "efficiency" model designed to replace older-generation chips. The efficiency model boasts significant space savings, requiring 67% fewer server racks to achieve the same computing power as its predecessors. This efficiency makes it ideal for media streaming, web services, and database operations.

"Simply put, performance up, power down," stated Intel Chief Executive Pat Gelsinger at the Computex trade fair in Taipei, where he unveiled the new server.

The high-performance model caters to tasks demanding more processing power, such as running complex AI models.

The efficiency Xeon is available now, with the performance model slated for release in Q3. Additional variations are planned for launch next year. The one-year delay in the sixth generation's release stemmed from Intel's decision to implement a new manufacturing process.

Competitive AI Acceleration

On a separate note, Intel disclosed aggressive pricing for its Gaudi 3 AI accelerator kits. An eight-chip Gaudi 3 kit is priced at $125,000, significantly lower than the $65,000 list price of the previous generation Gaudi 2. This competitive pricing positions Intel favorably in the AI accelerator market.

Industry PE Ratio as a Valuation Tool

For investors interested in comparing Intel's valuation relative to its industry peers, the Financial Modeling Prep (FMP) Industry PE Ratio API (https://site.financialmodelingprep.com/developer/docs/industries-pe-ratio-api) provides a valuable resource. This API offers daily updated industry PE ratios, allowing you to assess whether the technology sector, where Intel operates, is currently overvalued or undervalued. By leveraging this API and similar valuation tools, investors can make more informed decisions about their technology holdings.