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With a market cap of $85.2 billion, Intel Corporation (INTC) is a global leader in semiconductor innovation, designs and manufactures microprocessors, chipsets, and computing solutions for consumer, enterprise, and data-centric markets. Expanding beyond traditional computing, Intel is driving advancements in AI, autonomous driving, networking, and edge computing through its diverse business segments.
Shares of the Santa Clara, California-based company have underperformed the broader market over the past 52 weeks. INTC stock has dipped nearly 55% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.6%. On a YTD basis, shares of INTC are down 1.5%, compared to SPX's 2.7% gain.
Looking closer, the chip giant has also lagged behind the Technology Select Sector SPDR Fund's (XLK) 13.8% return over the past 52 weeks and a marginal YTD drop.
Despite reporting a wider-than-expected Q3 loss of $0.46 per share on Oct. 31, Intel's stock surged 7.8% the next day as the company posted revenue of $13.3 billion surpassing Street forecasts. Investors reacted positively to Intel’s strong AI PC momentum, expecting to ship over 100 million units by 2025, and a 9% year-over-year revenue increase in the Datacenter and AI Group (DCAI) to $3.3 billion. The Network and Edge Group (NEX) also grew 4% to $1.5 billion, showing resilience in key segments. Additionally, Intel’s aggressive cost-cutting efforts, including a planned 15% workforce reduction and a 20% cut in capital expenditures, signaled a stronger path to profitability.
However, Intel stock underperformed in December due to the unexpected CEO departure, leaving the company without stable leadership amid its complex foundry transition and restructuring. Market share losses to AMD and Nvidia, along with weak investor reaction to Intel's new AI chips, also contributed to the decline.
For the fiscal year, which ended in December, analysts anticipate INTC to report a loss of $0.87 per share, a significant year-over-year decline. The company's earnings surprise history is mixed. It beat the consensus estimates in one of the last four quarters while missing on three other occasions.
Among the 37 analysts covering the stock, the consensus rating is a “Hold.” That’s based on one “Strong Buy” rating, 30 “Holds,” one “Moderate Sell,” and five “Strong Sells.”
On Jan. 29, Rosenblatt Securities reaffirmed a “Sell” rating on Intel with a $20 price target, citing weak PC demand, market share losses, and challenges in AI and data centers amid the company’s leadership transition.
As of writing, INTC is trading below the mean price target of $25.55. The Street-high price target of $62 implies a significant potential upside.
