Intel and Amazon Expand Partnership: Time to Buy These Iconic Tech Stocks?

As markets rise in anticipation of the Fed cutting rates tomorrow, Intel INTC and Amazon AMZN have helped lead the broader rally among tech stocks after announcing plans to expand their partnership on Monday.Intel’s stock had popped +8% in today’s trading session after recently falling to a 10-year low of $18 a share in August.Meanwhile, Amazon shares were up as much as +2% in early morning trading and are now sitting on gains of over +20% for the year with AMZN edging toward $200.Image Source: Zacks Investment ResearchPartnership Overview: Enhancing AWS Cloud Services  With Intel having a long-standing partnership to support Amazon’s cloud segment Amazon Web Services (AWS), the iconic tech companies have a new agreement to develop custom AI chips.The chips will be developed using Intel’s 18A process which is designed to enhance performance and energy efficiency in a bid to boost the AI-as-a-service (AIaas) offerings of AWS.  Perfect Timing for IntelLosing ground to many of its semiconductor peers, Intel stated its partnership to provide AI-powered chips for Amazon will be a multiyear, multibillion-dollar deal. The timing couldn’t be better as it gives Intel another opportunity to regain its footing as a major chip manufacturer after drastically losing market share to Nvidia NVDA and AMD AMD.This may also quiet fears of Intel being able to preserve enough cash and gateways to growth to support the costly operations of its foundry business as a chip producer for other companies. These concerns have largely loomed despite Intel having $29.27 billion in cash & equivalents at the end of Q2 2024 and $206.2 billion in total assets compared to $85.77 billion in total liabilities.However, Intel’s sales and operating performance have steeply contracted in recent years although a modest rebound is expected in fiscal 2025. Notably, to capitalize on the collaboration with Amazon, Intel will be splitting its foundry business into an independent subsidiary to improve the segment’s efficiency.Image Source: Zacks Investment ResearchAmazon’s Upper Echelon Growth & Balance SheetLuckily for Intel, it has continued a lucrative partnership with a cash cow in Amazon, with the e-commerce leader and tech conglomerate having over $89 billion in cash & equivalents. Furthermore, Amazon has $554.18 billion in total assets versus $318.37 billion in total liabilities.Image Source: Zacks Investment ResearchThe Magnificent Seven-themed tech stock is expected to see high double-digit EPS growth in FY24 and FY25 with total sales projected to increase by over 10% in these fiscal years respectively. Notably, Amazon’s top line is edging toward a whopping $700 billion.Image Source: Zacks Investment ResearchFinal ThoughtsAmazon and Intel’s stock both land a Zacks Rank #3 (Hold). The continued partnership between these tech giants should be lucrative for both companies and certainly adds to their prospects of being viable long-term investments.However, there could be better buying opportunities in Amazon’s stock after a sharp YTD rally while it may be too soon to say Intel shares are at an inflection point in regards to a continued rebound.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Intel Corporation (INTC): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks