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California-based Intel Corporation (INTC), a leading semiconductor giant with a market cap of $93.8 billion, operates primarily in the technology sector. The company is expanding its focus into data-centric areas such as artificial intelligence (AI), autonomous driving, and advanced driver assistance systems.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Intel fits this criterion perfectly, exceeding the mark. Intel is renowned for its pioneering role in developing microprocessors and chipsets, particularly its dominance in the x86 architecture that powers the majority of personal computers.
However, the computer processor maker has notably dipped 60.8% from its 52-week high of $51.28, achieved in December last year. Shares of INTC are down 33.6% over the past three months, significantly underperforming the broader S&P 500 Index's ($SPX) 4.7% gains over the same time frame.
Longer term, Intel is down 60% on a YTD basis, lagging behind SPX's 15.9% gains. Moreover, shares of INTC have declined 45.1% over the past 52 weeks, compared to SPX's 22.4% returns over the same time frame.
INTC has been trading below its 50-day and 200-day moving average since April, indicating a bearish price trend.
Intel has underperformed due to a decline in market share, intensified competition, and difficulty adapting to the growing demand for mobile and AI chips. However, Intel shares rose 9.5% on Aug. 30 after the company announced it had engaged Morgan Stanley and Goldman Sachs to explore strategic alternatives, including potential restructuring and divestitures, aiming to reverse its financial decline.
But, the stock dropped 8.8% the next trading day due to worries about weak U.S. manufacturing data and the potential impact of an anticipated Federal Reserve interest rate cut. Additionally, renewed fears of a potential Chinese invasion of Taiwan contributed to the steep decline.
Also, Intel’s rival, Broadcom Inc. (AVGO), has significantly outperformed INTC, with a 75.1% gain over the past 52 weeks and a 36.9% YTD rise.
Due to the stock’s underwhelming price action, analysts are cautious about INTC’s prospects. The stock has a consensus rating of “Hold” from the 36 analysts in coverage, and the mean price target of $29.19 suggests a premium of 45.2% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
