What Should You Believe About Intel?

Many have had their eyes closely on Intel Corp (NASDAQ: INTC) in recent weeks, given a massive nosedive in the stock price (see below). INTC has hit a 10-year low, given recent news on cutting 15% of its workforce and removing the dividend. While some applaud the efforts to cut costs, it’s not exactly a move that inspires confidence in the company.

INTC chart, courtesy TradingView

At first, things were looking more dire for intel, yet a few weeks since the initial drop things have gotten more interesting. We now have plenty of different opinions on exactly what an investor should or should not do with INTC. And there is no clear consensus.

For example, recent articles are saying about Intel:

• It’s “a company on the brink”
• It’s had “one disaster after another”
• It’s a “falling knife”

These are among other negative and, in some cases, rather vivid analogies. Yet at the same time, we see:

• It “can surge 3x to $60”
• Is “turning bullish for the first time in years” 
• It “is throwing the kitchen sink,” and people should buy it.

Unless you’re tracking the efforts of the chip and semiconductor industry daily, all of this can be somewhat confusing. We don’t see this divisiveness every day. So, what should you do?

We can’t tell you. We don’t know your willingness to accept risk, your situation, and your knowledge of the industry. We can only warn you that there is risk here, the dust isn’t settled on recent events, and this is a very dynamic industry at the moment, given AI and increased demand for computer chips. 

However, amidst the noise, there are a few factors that will almost certainly be affecting Intel’s fate in the short and long-term. 

• Intel’s regular operations are doing fine. Even if AMD is picking up, Intel is the clear leader when it comes to CPUs for normal PCs.
• Given the news cycle and how much Intel gets talked about compared to other stocks, much of the price drop could be an overreaction.
• Intel recently introduced their Intel® Gaudi® 3 AI accelerator, which could be a game-changer in the AI race.
• There are some rumors of the company breaking up or changing its structure, which could have multiple different major impacts.

When we look at what the analysts we follow on WallStreetZen say, we get a more focused picture, with some variation:

Based on the stories, you’d expect there to be plenty of analysts on both sides. However, the needle is roughly in the middle with a “Hold” consensus, and many hold ratings are maintained after the massive drop on August 2nd. There are concerns about whether INTC can hold or gain an advantage in its sector, but overall the average 1-year forecast suggests 50%+ potential upside, and the maximum 1-year forecast suggests a whopping 210%+ potential price increase.

The Takeaway: INTC has become one of the most divisive, uncertain stocks we’ve seen in a while, and that presents equal opportunity and risk. Remember that no one can entirely predict the market, and you will want to review multiple opposing viewpoints on this one if you want to get invested in Intel. Remember, there are plenty of other stock ideas to consider.

This is absolutely a stock to keep on your watchlist for further developments. Similarly, you’ll want further information and analysis on. Don’t feel like researching the latest on INTC every day? Here’s an easy shortcut: Use WallStreetZen Premium’s tools to get regular updates on Intel, including notable analyst upgrades or downgrades, plus all the fundamental information you need to make your final decisions.

🤖 Click here to see 38 due diligence checks on INTC on WallStreetZen 

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