Key Takeaways
- A recent tech sell-off has lowered the chipmaking industry’s capitalization by $500 billion.
- As a result of rival losses and revenue declines in key industries, Intel’s stock has dropped 37.7% in 2024.
- Intel’s strategies and optimistic projections point to the possibility of recovery and expansion in the upcoming years, notwithstanding present difficulties.
Due to a big sell-off in the computer industry, Intel is facing significant market issues. Find out what to anticipate in the wake of additional sanctions from Intel’s next earnings release.
The semiconductor industry’s stock market value has dropped by almost $500 billion as a result of the recent IT sector sell-off. Reportedly, the US intends to tighten its penalties on Chinese businesses. How this may affect Intel and what to anticipate from the next earnings report are examined by Techopedia.
Intel’s Stock: Current Issues
Since February 2020, Intel’s stock price has dropped by nearly half. DCAI (Data Centers and AI Group) had a 25% decline in sales.
In addition to lowering its Q2 earnings per share projection from $0.10 to $0.08, the business predicted that revenue would drop from $13 billion to $12.74 billion. When compared to its competition, the stock has been underperforming. It has decreased 37.7% since 2024 began.
A string of disasters appears to be undermining investors’ trust in the corporation. Microsoft’s announcement that it would switch from Intel to Qualcomm for its new PC gadget, Surface Copilot+, is one explanation. Because it was inferior to its rivals, the introduction of its new Meteor Lake processors also met a brick wall.
However, by 2030, the business wants to produce half of the world’s chips in the US and Europe. Additionally, in early 2024, the business declared the opening of the “first systems foundry for the AI era.” The company’s foundry division, however, lost $7 billion.
33% of the x86 computer processors sold were AMD processors, whereas 63% were Intel processors, according to Statista data. Furthermore, 71% of the benchmark test results for laptop CPUs were attributed to Intel.
Forecast for Intel’s Stock Price
Analysts at Bernstein continue to predict that Intel will report lower results the following week. On the other hand, lower prices offer investors a compelling chance to purchase.
This optimistic outlook stems from better projections from the CCG and DCAI groupings, the former of which expanded by 31% in the first quarter. CCG accounts for half of the business’s overall revenue. Additionally, the revenue from notebooks and desktop computers has increased by 37% and 31%, respectively. Additionally, Intel, which claims to be the first business to do so, has begun to reserve High NA EUV.
The valuation of Intel stock is extremely profitable, per TipRanks. They anticipate that in 2025 and 2026, profits per share would rise to $1.92 and $2.50, respectively.
Morgan Stanley predicts that Intel’s Gaudi 3 chip shipments will bring in $2–3 billion by 2025, which is another encouraging development. DNB Asset Management additionally quadrupled its acquisition of Intel stock and divested its Nvidia holdings.
With a non-GAAP margin of 60%, Motley Fool analysts estimate that Intel can save between $8 and $10 billion by 2025. Additionally, Intel is anticipated to be awarded a $8.5 billion grant under the CHIPS Act.
Last but not least, Intel has reduced its operating costs by $400 million while simultaneously increasing operational cash flow by 31% and adjusted free cash flow by about the same 30%.
As a result, Intel has a bright future—that is, if it can reach its sales and revenue goals and prevent more losses. The general geopolitical environment and the global economic recovery, which rely on loosening the restrictive monetary policy, will continue to influence Intel’s and the tech industry’s financial stability.
