As the artificial intelligence (AI) revolution enters its next critical phase, the Founder of Niles Investment Management, Dan Niles, is looking past current market darlings, betting that Intel Corp. (NASDAQ:INTC) is poised for a massive hardware resurgence.
Rise Of Agentic AI
While Wall Street watched Nvidia Corp. (NASDAQ:NVDA) see its GPUs “explode higher” during the initial AI training boom, Niles argues the landscape is fundamentally shifting.
The catalyst is “Agentic AI”—systems capable of executing complex, multi-step tasks across various applications rather than just returning simple chat responses.
This transition requires an orchestration engine to organize data, which is exactly what CPUs do best. According to Niles, Agentic AI requires “10 to 100 times more tokens” than basic chat-based AI.
Consequently, the hardware demand ratio, which previously stood at about eight GPUs for every one CPU, is rapidly moving closer to one-to-one.
A Surprising Value Play
Despite semiconductor ETFs rallying aggressively this year, Niles insists that Intel is “still undervalued” on an enterprise value-to-sales basis compared with peers such as Advanced Micro Devices Inc. (NASDAQ:AMD) and Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM).
Even though the legacy tech company just recently touched highs unseen since the year 2000, Niles believes its terminal value will drastically change over the next two to three years.
A massive driver for this growth is Intel's push to secure domestic supply chains. Niles expects the company to lock in “pretty big foundry customers” by the end of the year, potentially producing chips for mega-caps like Apple Inc. (NASDAQ:AAPL), Tesla Inc. (NASDAQ:TSLA), or even Nvidia in U.S.-based fabs.
Navigating A ‘Parabolic’ Sector
Niles does not dismiss the immediate risks in the broader market, acknowledging that semiconductor stocks are currently overbought in the short term. This comes as iShares Semiconductor ETF (NASDAQ:SOXX) has advanced 33.47% over the last month and 69.22% year-to-date.
He warned that a 15% to 20% sector correction wouldn’t surprise him at all, given current valuations. However, driven by the explosive compute needs of the Agentic AI buildout, Niles maintains a strong long-term conviction.
For investors willing to remain “nimble” through macroeconomic turbulence, he believes this shifting hardware dynamic makes the CPU giant a highly compelling play.
How Has Intel Performed In 2026?
Shares of INTC have surged by 226.86% year-to-date, while the Nasdaq Composite has advanced by 12.28% over the same period. It closed 6.82% lower on Tuesday at $120.61 apiece, and it was 2.60% higher in overnight trading.
Over the last month, INTC was up 93.35%, and it rose 218.32% over the last six months. Benzinga’s Edge Stock Rankings indicate that INTC maintains a strong price trend in the short, medium, and long terms.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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