Intel’s Underperformance Amidst Semiconductor Boom
Intel (INTC) continues to struggle to keep up with its large-cap semiconductor peers. While companies like Nvidia and Advanced Micro Devices have flourished, Intel’s stock has plummeted by close to 30% since the beginning of 2023. Over a 10-year period, Intel has witnessed a significant decline of nearly 46% in market value, starkly contrasting the growth seen in the industry.
The Looming Speculation of Dow Jones Ouster
Due to its unparalleled underperformance, there are discussions about the possibility of Intel being removed from the Dow Jones Industrial Average. Intel, being the most underwhelming stock on the DJIA, has seen a staggering decline of over 62% in 2024 alone, bringing its market cap below $100 billion for the first time in almost thirty years.
Potential for a Comeback?
Despite its struggles, Intel has shown signs of hope with talks of strategic options, including potential business segment splits. The company aims to pivot its business model to enhance shareholder value following a dismal Q2 earnings report, which included a $1.61 billion GAAP loss. Intel’s investments in AI technologies are projected to pay off in the long run, with expectations of significant growth in the AI PC market.
Forecast and Target Price Evaluation
Intel’s forecast for the upcoming quarter is modest, with revenue expected between $12.5 billion and $13.5 billion and an adjusted net loss per share. Analysts have set an average target price of $29.19 for Intel stock, suggesting a potential upside of over 50% from current levels. However, the consensus remains at a “hold,” reflecting the uncertainty surrounding Intel’s future amidst fierce market competition.
