Intel Stumbles: Stock Plunges 60% in 2024 as AI Rivals Leave It in the Dust

Intel Corporation (INTC), the world's largest semiconductor company, has been struggling to keep up with the rapid advancements in the artificial intelligence (AI) landscape. In 2024, Intel's stock price has plummeted by 60%, underperforming the broader market and its AI-focused competitors. This significant decline can be attributed to Intel's delayed response to the AI boom and its lack of investment in AI-specific hardware and software.

Intel's AI shortcomings have allowed its competitors, such as Nvidia (NVDA) and Advanced Micro Devices (AMD), to gain a significant competitive edge. Nvidia, in particular, has become the dominant player in the AI market, with its graphics processing units (GPUs) powering most of the large language models being developed at OpenAI, Microsoft, Google, and Amazon. Nvidia's GPUs also enable the heaviest AI workloads, making it a formidable force in the AI market. In contrast, Intel has been mostly shut out of AI, with its server chips lagging far behind Nvidia's and losing market share to AMD.

Intel's board of directors has recognized the company's AI shortcomings and has taken several strategic decisions to address them. These decisions include investing in AI accelerators, adopting an open systems strategy, and forming partnerships and collaborations with various industry players. Intel has also made significant investments in R&D and manufacturing facilities to stay competitive in the AI market.

Despite these efforts, Intel's stock price has continued to decline, and the company has faced criticism for its slow response to the AI boom. In December 2024, Intel's board ousted Pat Gelsinger from the CEO role after a tumultuous four-year tenure. This decision was likely influenced by Intel's poor performance in the AI market and its failure to capitalize on the growing demand for AI-specific hardware and software.

Intel's competitors, on the other hand, have leveraged their AI capabilities to gain a competitive edge. Nvidia, for example, has seen its stock price soar by 178% in 2024, while AMD's stock price has risen by 111% in the same period. These companies have invested heavily in AI-specific hardware and software, allowing them to attract AI developers and maintain a competitive edge in the AI market.

In conclusion, Intel's lack of investment in AI-specific hardware and software, as well as its delayed response to the AI boom, have contributed significantly to its decline in the market. The company's board has taken several strategic decisions to address these issues, but Intel's stock price has continued to decline. Intel's competitors, such as Nvidia and AMD, have leveraged their AI capabilities to gain a competitive edge, and their stock prices have soared in 2024. As the AI market continues to grow and evolve, Intel will need to adapt and invest in AI-specific technologies to remain competitive and regain market share.