Participants at Intel's Artificial Intelligence (AI) Day stand in front of a poster during the event in the Indian city of Bangalore on April 4, 2017.

Investors should not overlook Intel's artificial intelligence prowess, according to one Wall Street firm.

Barclays reiterated its overweight rating and raised its price target for Intel shares, predicting the chipmaker will thrive in multiple secular growth markets.

The company's shares are roughly flat midday Monday after the report.

"Intel has a better position in the AI inference market than they get credit for, which we expect to begin to play out in 2018," analyst Blayne Curtis wrote in a note to clients Monday.

Intel is the market leader in CPUs [central processing units], while Nvidia dominates the GPU [graphics processing units] chip industry.

The company has an "unappreciated advantage vs. GPUs … While a GPU can show performance advantages vs. a CPU in a controlled favorable setting, a CPU offers a greater ease of use and better real world performance" for AI applications.

Curtis increased his price target for Intel shares to $55 from $45, representing 21 percent upside to Friday's close.

The analyst noted Intel's Skylake chip platform doubled machine learning performance.

"We expect large improvements in future generations as that workload takes off," he wrote.

The analyst is also optimistic on the company's acquisition of Mobileye, a leader in autonomous driving technology solutions and Intel's wireless modem business.

"With the PC market stabilizing and a declining piece of the overall mix, we believe DCG [Intel's data center group] can increasingly drive top-line growth along with other diversification initiatives," he wrote. "We also look for a rotation into Intel as it is one of the cheapest names in the large cap semi space."

Intel's stock is up 26 percent year to date through Friday compared with the S&P 500's 15 percent gain.