Intel (INTC) Stock Drops 5% as NVIDIA Takes Aim at Its PC Business

TLDR

• Intel fell nearly 5% in premarket trading Monday as investors weighed a fresh AI chip strategy against a new threat from NVIDIA.
• Intel unveiled its new AI GPU, Crescent Island, targeting the lower-cost inference market, with limited shipments planned by end of 2026.
• The chip uses cheaper LPDDR5 memory and air cooling instead of the expensive HBM and liquid cooling used by NVIDIA and AMD.
• NVIDIA fired back with its RTX Spark Superchip, a direct challenge to Intel, AMD, and others in the PC processor market.
• Analysts hold a consensus “Hold” rating on INTC with an average price target of $77.65, well below Monday’s trading price.

Intel had a lot to say on Monday — and markets weren’t entirely sure how to feel about it. The chipmaker dropped roughly 5% in premarket trading to around $109, pulling back from a 52-week high of $132.75 hit in May.

Intel Corporation, INTC

The company laid out its next move in AI: a new GPU called Crescent Island, built specifically for inference workloads rather than the more competitive training market. Limited shipments are expected by the end of 2026.

Kevork Kechichian, who runs Intel’s data-center group, told the Financial Times that the company deliberately stepped back from trying to take on NVIDIA in AI training, pointing to the disappointing run of its Gaudi chip program as a lesson learned.

Crescent Island: A Cheaper Path Into AI

The strategy behind Crescent Island is cost. Instead of the high-bandwidth memory (HBM) and liquid cooling that NVIDIA and AMD rely on, Intel’s chip uses LPDDR5 memory and standard air cooling.

That positions it as a more budget-friendly option for AI customers who don’t need the raw power of a top-end GPU but still want capable inference hardware.

Kechichian also said Intel is exploring whether certain versions of the chip could be sold in China, as long as they stay within U.S. export rules — pointing to real demand at that price point.

Under CEO Lip-Bu Tan, Intel plans to manufacture Crescent Island in its own foundries, a move that could cut costs compared to rivals who depend on TSMC.

That in-house production push is a key part of Intel’s broader turnaround plan, which has drawn mostly positive investor reaction since new leadership took over.

NVIDIA Hits Back With RTX Spark

The timing wasn’t ideal. On the same day Intel outlined its AI hardware plans, NVIDIA announced the RTX Spark Superchip — a chip designed to compete directly in the PC processor market where Intel has long been dominant.

NVIDIA CEO Jensen Huang said the chip, built with MediaTek and paired with Windows, is meant to power AI agents that can run tasks across apps with minimal user input. NVIDIA and Microsoft reportedly spent three years on the platform.

That move puts pressure on Intel across two fronts — AI infrastructure and its core PC business — at the same time.

On the institutional side, Intel continues to attract buying. Multiple firms added to positions recently, and 64.53% of the stock is held by institutional investors.

The company’s most recent earnings came in well ahead of expectations — $0.29 EPS against a consensus of $0.01, with revenue of $13.58 billion beating estimates of $12.32 billion.

Looking ahead, analysts expect Intel to report Q2 EPS of around $0.19 and full-year EPS of $0.63. The next earnings date is estimated around July 23, 2026.

Citigroup raised its price target to $130 and Benchmark lifted its to $140, both in May. Still, the average analyst target sits at $77.65, a reminder that not everyone is sold on the rally.

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