Stock Analysis & Ideas

Intel (NASDAQ:INTC) Takes Competition Head-On, Launches New GPU

Story Highlights

Intel is taking the competition head-on with its new A770 GPU launch. However, the industry-wide slowdown remains a drag on chip makers, including INTC.

Intel (NASDAQ:INTC) is taking its rivals head-on with the launch of the new ARC A770 GPU (graphics processing unit). At the Intel Innovation conference, the semiconductor giant said that the ARC 770 GPU would be available from October 12 at a retail price starting at $329. The pricing of the new GPU is at par with rival Nvidia’s (NASDAQ:NVDA) comparable offering. Intel also announced a new Unison app and 13th-generation desktop processors.

Notably, Intel has lost market share due to the delay in new product launches and “prior product missteps,” noted Benchmark analyst Cody Acree. However, the analyst stated, “Intel’s leadership is putting in place processes and methodologies that are currently working to correct mistakes of the past and place the company on a new footing of increased competitiveness in both design and manufacturing processes.”

What is the Prediction for Intel stock?

Intel stock has corrected by over 46% year-to-date, and these new launches could support its comeback. However, Acree highlighted that the industry is in a cyclical correction, reflected by a slowdown in consumer demand on account of macro headwinds. The analyst maintains a Hold recommendation on INTC stock.

Along with Acree, most analysts remain sidelined on INTC stock. It has received four Buy, 16 Hold, and nine Sell recommendations for a Hold consensus rating on TipRanks. Meanwhile, analysts’ average price target of $38.55 implies 43.4% upside potential. 

While analysts maintain a Hold, hedge fund managers sold 1.3M INTC stock last quarter. However, insiders bought INTC stock worth $501.1K. Intel stock sports a Neutral Smart Score of six out of 10 on TipRanks.  

Bottom Line: Lower Demand a Hurdle

Weakness in consumer demand due to macro and geopolitical headwinds will likely hurt chip makers in the short term. Meanwhile, DigiTimes, a daily journal for the tech industry, reported that major clients of Taiwan Semiconductor (NYSE:TSM) are downwardly adjusting their orders amid the slowdown. 

All of these indicate that the chip makers could struggle to lift sales in the near term. Using TipRanks’ Stock Comparison tool, here is a summary of how top chip makers stack up on TipRanks’ valuable datasets.

The data reveals that only AMD (NASDAQ:AMD) has an Outperform Smart Score on TipRanks, implying it is most likely to beat market averages. 

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