Intel Rallies After Saying New Server Chips Will Come Sooner Than Expected

(Bloomberg) — Intel Corp., the biggest maker of computer processors, surged 7.6% after announcing that new products for the lucrative server market will come sooner than expected.

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The company will shift to a more advanced production technique and offer a new chip — packed with more computing cores — faster than analysts had predicted, according to Executive Vice President Sandra Rivera. She disclosed the company’s plans for the server market as part of a webcast for investors Wednesday.

Chief Executive Officer Pat Gelsinger is trying to reverse market-share losses by reclaiming technological leadership in the server field, one of the most profitable parts of its business. Under his predecessors, Intel lost ground to rival Advanced Micro Devices Inc. And some customers, such as Amazon.com Inc.’s AWS, began making homegrown alternatives to Intel’s chips, cutting into its revenue and profits. Server processors are the backbone of corporate networks and the giant data centers that run the internet.

Intel shares rose $2.23 to $31.52, marking their biggest one-day gain since November. The stock had been up 11% in 2023 through Tuesday, lagging the gains of other chipmakers.

The company has started sending samples of a chip called Sierra Forest to customers and plans to start shipping it in the first half of 2024, Rivera said. That product has 144 processing cores and is built for cloud-computing workloads.

The early shift to what’s known as 18A process technology is a huge positive, according to Susquehanna Financial Group analyst Christopher Rolland.

(Updates with closing share price starting in first paragraph.)