The U.S. Department of Commerce has enhanced export restrictions on advanced chips, AI (Artificial Intelligence) technologies, and semiconductor equipment to China. While Nvidia (NASDAQ:NVDA) does not anticipate the new restrictions having a meaningful impact on its financials in the short term, Intel (NASDAQ:INTC) has not yet offered any updates in this regard. Nevertheless, drawing from prior instances, there is a concern that INTC’s sales may experience a downturn, and these fresh limitations could potentially harm its financials and sales of its China-specific AI processor.
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Intel derives nearly 27% of its total revenues from China. The company has previously disclosed that U.S. restrictions on exporting specific chips and technology have decreased its overall sales and continue to negatively impact its financial performance. Nonetheless, the higher demand from other regions, led by growing adoption and deployment of AI, could help offset the negatives stemming from the new export curbs.
In a note to investors dated October 18, Bernstein analyst Stacy Rasgon said that he remains uncertain about the impact of the new restrictions on Intel and Advanced Micro Devices (NASDAQ:AMD). However, he believes that the long-term TAM (total addressable market) for these chip companies is significant, even without China. Rasgon reiterated a Hold on INTC stock on October 18.
While it remains to be seen how the fresh restrictions hurt Intel, let’s look at what the Street recommends for its share price.
What is the Forecast for Intel Stock?
Intel stock has gained about 39% year-to-date, reflecting investors’ enthusiasm over AI and expected improvements in the PC market and enterprise demand. While Intel is taking measures to become more competitive, it has been losing market share to its competitors, which keeps analysts sidelined.
With six Buy, 20 Hold, and five Sell recommendations, Intel stock has a Hold consensus rating. Analysts’ average price target of $36.63 shows a limited upside potential of 1.58% from current levels.
