Intel's Stock Surges 148% Amid AI Boom, But Risks Remain
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: Fool
- Stock Performance: Intel's (INTC) stock has surged 148% over the past 12 months, significantly outperforming Alphabet, the best performer among the 'Magnificent Seven', which rose only about 47%, indicating a strong rebound for Intel amid the AI boom.
- Technological Breakthrough: Intel's '18A' manufacturing process enhances chip efficiency by rearranging internal structures, providing substantial support for its stock price increase and alleviating concerns about its innovation capabilities.
- Market Competition: Despite Intel's impressive stock performance, it faces challenges in competing with Taiwan Semiconductor Manufacturing Company (TSMC), whose scale and reliability make it the preferred choice for many tech firms, compounded by Intel's yield issues.
- Valuation Risks: Intel's current price-to-earnings ratio stands at 88.7, significantly higher than Nvidia (39.4), Microsoft (27.4), and Meta (21.5), indicating that the market has fully priced in expectations for future growth, which may be difficult to achieve, warranting caution from investors.
Analyst Views on INTC
Wall Street analysts forecast INTC stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for INTC is 39.30 USD with a low forecast of 20.00 USD and a high forecast of 52.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
29 Analyst Rating
5 Buy
19 Hold
5 Sell
Hold
Current: 42.490
Low
20.00
Averages
39.30
High
52.00
Current: 42.490
Low
20.00
Averages
39.30
High
52.00
About INTC
Intel Corporation is a global designer and manufacturer of semiconductor products. The Company operates through three segments: Intel Products, Intel Foundry, and All Other. Its Intel Products segment includes Client Computing Group (CCG), Data Center and AI (DCAI), Network and Edge (NEX). The CCG is bringing together the operating system, system architecture, hardware, and software application integration to enable PC experiences. DCAI delivers workload-optimized solutions to cloud service providers and enterprises, along with silicon devices for communications service providers, network and edge, and HPC customers. NEX helps networks and edge compute systems from fixed-function hardware to general-purpose compute, acceleration, and networking devices running cloud native software on programmable hardware. The Intel Foundry segment comprises technology development, manufacturing and foundry services. All Other segments include Altera, Mobileye, Other.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
