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Will Intel Gain Back its Charm Among Investors?
Stock Analysis & Ideas

Will Intel Gain Back its Charm Among Investors?

The stock of Intel (INTC) has been under pressure for quite some time now.

It has been struggling with product ramps, falling market share, increasing competition from Advanced Micro Devices (AMD) and Nvidia (NVDA), lackluster performance on Wall Street, and other problems.

At the same time, Intel is working to improve its business by selling low-margin activities and investing in new growth areas. The recent introduction of Intel’s Alder Lake processors could also help the business reverse the tide in its favor to some extent while keeping it competitive.

This semiconductor chip manufacturer’s stock has gained 8% over the past year but has lost about 13% in the last six months.

Weak Q3 but CEO Remains Hopeful

On October 21, Intel released its third-quarter earnings. The investors were dissatisfied with the results.

The top-line figures improved 5% from the year-ago quarter, but they fell short of the average forecast. Overall, the results indicated that Intel may be at risk of falling behind its competitors.

Nevertheless, Intel CEO Pat Gelsinger thinks the company has the power to once again lead the fast-growing semiconductor sector.

During the Q3 earnings call, Gelsinger stated, “Q3 shone an even greater spotlight on the global demand for semiconductors, where Intel has the unique breadth and scale to lead. Our focus on execution continued as we started delivering on our IDM 2.0 commitments… We also announced major customer wins across every part of our business.”

He further added, “We are still in the early stages of our journey, but I see the enormous opportunity ahead, and I couldn’t be prouder of the progress we are making towards that opportunity.”

Encouraging TipRanks Metrics

Despite the aforementioned challenges, the TipRanks analytics shows some impressive positive stats about the company.

Intel stock scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

Furthermore, TipRanks’ Stock Investors tool shows that investors who hold portfolios on TipRanks are growing their exposure on Intel stock. Notably, about 2.5% of these investors have increased their exposure to Intel stock in the last 30 days.

Also, TipRanks’ Hedge Fund Trading Activity tool indicates that hedge fund managers have increased their holdings in Intel stock by 5.0 million shares in the last quarter.

These metrics illustrate that Intel is regaining the trust and affection of the investors.

Expert’s Take

While uncertainties remain, Citigroup’s Christopher Danely believes that October notebook shipments indicate increasing demand from the enterprise end market.

It’s “clearly good news” for both Intel and Advanced Micro Devices, according to Danely. However, he does not anticipate the enterprise advantage to persist more than a few quarters, and he points out that Q4 notebook shipments are still below seasonality.

As a result, the analyst maintained a Neutral rating on Intel stock.

Wall Street’s Take

Given the near-term headwinds, Wall Street analysts prefer to remain on the sidelines on Intel stock. On TipRanks, Intel has received 4 Buys, 12 Holds, and 6 Sells, for a Hold consensus rating. As for the price target, the average INTC price target of $53.90 implies 8% upside potential to current levels.

Disclosure: At the time of publication, Shalu Saraf did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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