In recent years, equity markets have thrived on the back of megatrends such as artificial intelligence (AI), clean energy, nuclear power, and digital transformation. These transformative themes have driven significant investor enthusiasm, leading to remarkable gains for several stocks. However, not all companies have benefited from this momentum.
Take Intel (INTC) and Enphase Energy (ENPH), for example. Both stocks have missed out on this rally and significantly eroded shareholder value.
Intel, a well-known player in the semiconductor space, has seen its stock tumble about 53% over the past year. More troublingly, Intel’s shares have dropped an alarming 71.2% over a five-year period, substantially underperforming the broader market. This dramatic decline reflects the company’s struggle to capitalize on AI and its market-share losses.
Meanwhile, Enphase Energy, a provider of microinverter-based solar-plus-storage systems, has faced its own challenges. The company’s stock is down 40% in just the past year and has lost more than 74% of its value over two years. Intensifying competition and ongoing weakness in European markets have weighed heavily on Enphase’s performance, casting a shadow over its prospects.
With both stocks registering such steep declines, the big question is whether they present a buying opportunity or are better left untouched in 2025. Let’s take a closer look.
Will Intel’s Struggles Continue in 2025?
Intel, once the leading company in the semiconductor space, has ceded significant ground to competitors like Advanced Micro Devices (AMD), especially in key segments such as high-performance computing. The company’s struggles to capture the surging demand for AI technology further highlight its lag in innovation and market responsiveness, leading to a sharp correction in its share price and stagnated growth.
The company’s aggressive cost-cutting measures have provided some relief. But, Intel’s path to recovery is far from assured. Broader economic headwinds, such as cyclical slowdowns in the semiconductor industry and ongoing inventory corrections, could continue to pose challenges for the company in 2025 and weigh heavily on its financials. Moreover, macroeconomic uncertainties suggest continued external pressures.
Adding to the pain, Intel’s next-gen Gaudi 3 AI accelerator has recorded slower-than-anticipated adoption, and transition issues from Gaudi 2 jeopardize its ability to achieve meaningful revenue growth in this critical segment. The company’s foundry operations also face significant competition and are generating hefty losses. These factors indicate that Intel’s journey to reclaim market leadership will not be easy.
While the company is making efforts to stabilize operations and benefit from demand for AI-enabled PCs and advanced CPUs, execution risks, stiff competition, and an eroded market position suggest a protracted and uncertain recovery.
Wall Street analysts maintain a cautious outlook on INTC stock and have a “Hold” consensus rating.
Is Enphase Stock Set to Underperform in 2025?
Enphase Energy is navigating a challenging landscape marked by higher interest rates, intensifying competition, and weakness in Europe. These factors have affected the company’s financial performance and stock value.
The company achieved sequential growth in the third quarter in the U.S., which accounts for 75% of Enphase’s revenue. However, competitive pressures are expected to intensify, presenting hurdles for sustained growth. Meanwhile, Europe remains a tough market, weighed down by falling power prices and slow economic growth. These persistent challenges are likely to continue impacting the company’s overall financial performance in 2025.
However, there are reasons for some optimism. A potential decline in interest rates, coupled with Investment Tax Credit (ITC) incentives and expectations of an increase in power prices in 2025, could provide significant support for Enphase’s U.S. operations. Moreover, the company’s new product launches and improvements in the supply chain will support its operations.
Wall Street remains cautiously optimistic about Enphase’s prospects, reflected in its “Moderate Buy” consensus rating.
While growth prospects in the U.S. look promising, investors should exercise caution, as risks posed by competitive pressures and weakness in Europe could limit the near-term upside potential.
