There’s no doubt that the Gaudi 3 chip will prove to be a game-changer for chip stock Intel (NASDAQ:INTC), but will it prove enough of one to matter? The latest projections say that any serious game-changing may not take place for another year or more, and that was enough to send Intel shares on a slide down nearly 2% in Tuesday morning’s trading.
It almost looked like good news for Intel, as it revealed that its Gaudi 3 chip should pull in around $500 million in sales this year alone. And in isolation, that would be good news, until you look across the street and see what kind of business rival chip stock Nvidia (NASDAQ:NVDA) is doing in the same market. Nvidia, the same reports noted, pulled in $18.4 billion in just one quarter in the market that the Gaudi 3 is poised to enter. Keeping that pace up for a full year means around $72 billion in total earnings…and Intel is looking at a $500 million take. For the year.
More than Just the Gaudi 3
The saving grace for Intel here is that the Gaudi 3 is not its only chip in the market. New reports about the Lunar Lake lineup of chips—particularly the Battlemage GPU—says that it could be a highly-efficient little powerhouse of a chip. It’s potentially very useful for handheld gaming applications, though it’s unclear whether or not the Battlemage can take on desktop gaming loads. Either way, Intel will need some quality products with good use cases because its latest earnings report didn’t turn out all that hot. While the numbers came in reasonably well, guidance wasn’t exactly inspirational and left investors cold.
Is Intel a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on four Buys, 23 Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 3.15% rally in its share price over the past year, the average INTC price target of $39.96 per share implies 29.15% upside potential.
Is INTC the Right Stock to Buy for Passive Income?
Before you hurry to invest in INTC, think about the following:
TipRanks’ team has built a Smart Dividend Stock Portfolio for investors, and Intel is not included. Our portfolio highlights companies that have been hand-picked for their potential to deliver significant passive income for years to come.
Get a FREE sample of dividend stock insights! >>
