Intel Corp (NASDAQ: INTC) is pushing meaningfully to the upside this morning following reports that the struggling chipmaker plans on outsourcing marketing to artificial intelligence (AI).
The multinational has partnered with the Dublin headquartered Accenture Plc (NYSE: ACN) that plans on using AI to replace many of INTC’s marketing jobs.
Intel’s move is reportedly a part of its broader commitment to lower costs and cruise swiftly toward profitability. At the time of writing, Intel shares are up some 23% versus their year-to-date low.
Intel to save millions from using AI for marketing
INTC is convinced that tapping into Accenture’s AI technology will help efficiently transform data into information, personalize customer experiences, and automate processes over time.
The semiconductor behemoth hasn’t disclosed the kind of costs it expects to save from its team up with ACN – but it’s reasonable to assume that they’d be in the ballpark of hundreds of millions.
Why? Because Intel is known to spend generously on marketing. In 2024, its advertising expense alone stood at more than $850 million, while the broader SG&A costs stood at a whopping $5.50 billion.
And while that may not sound like much for a chipmaker that generated about $53 billion in revenue last year, INTC currently is in a place where every dollar counts in its mission-critical pursuit of profitability under the new chief executive, Lip-Bu Tan.
CEO Tan must find a way to drive the company back into the growth trajectory to make investors regain interest in the Intel stock, which may help push its price up in the back half of 2025.
AI marketing may prove a wild card for INTC shares
On the flip side, using artificial intelligence and laying off professionals in the quest for a notably leaner marketing team is a wild card at best.
Could it prove effective in improving Intel’s marketing efforts? Or is it going to hurt the company further on that front? Only time will tell. In the worst-case scenario, turning to AI for marketing could result in reputational damage for INTC.
That said, it’s somewhat exciting to see the NYSE-listed firm delivering on its promise of lowering its global headcount under Lip-Bu Tan.
CEO Tan is fully committed to eliminating middle management to make processes more efficient at Intel. This could be part of the company’s rumoured plans of cutting its workforce by as much as 20% by the end of 2025.
Note that Intel shares currently pay a dividend yield of 2.24%, which makes them relatively more attractive to own at current levels.
How Wall Street recommends playing Intel stock in 2025
While the turnaround is already progressing at INTC under chief executive Lip-Bu Tan, Wall Street analysts remain on the back foot when it comes to investing in Intel stock.
Consensus rating on the semiconductor stock remains at “hold” only, with the mean target of a little below $21.50 indicating potential downside of about 5.0% from here.
The post How much could Intel save as it turns to AI for marketing? appeared first on Invezz
