Shares of chip maker Intel (NASDAQ:INTC) are on a tear, rising over 57% year-to-date. Further, INTC stock hit a new 52-week high of $40.84 on November 15 as five-star analyst Vijay Rakesh of Mizuho Securities upgraded the stock to Buy from Hold. While Rakesh has turned bullish, Wall Street analysts’ average price target suggests a pullback in INTC stock.
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Analysts See Challenges Ahead
The rally in Intel stock is supported by the company’s solid financial performance throughout this year. It’s worth noting that Intel’s third-quarter earnings exceeded analysts’ expectations and raised its outlook, signaling a continued improvement in its financials. Additionally, the anticipated rebound in the PC market and massive opportunities led by AI (artificial intelligence) contribute to INTC stock’s bull case.
Looking ahead, Rakesh expects INTC to benefit from “new Server product launches and Foundry customer announcements.” However, Bank of America Securities analyst Vivek Arya believes that the company’s margins will remain under pressure, driven by increased costs related to new products. The analyst lowered INTC’s price target to $32 from $35 and reiterated a Sell recommendation on October 26.
Further, Goldman Sachs analyst Toshiya Hari also maintained a Sell recommendation on Intel stock on October 27. The analyst expects Intel to lose market share in the traditional CPU market to Advanced Micro Devices (NASDAQ:AMD). On the other hand, TD Cowen analyst Matt Ramsay and KeyBanc analyst John Vinh reiterated a Hold recommendation on INTC stock following the Q3 earnings print last month.
What is the Stock Prediction for Intel?
Overall, Wall Street analysts remain sidelined on Intel stock. It has a Hold consensus rating based on five Buy, 18 Hold, and four Sell recommendations. Further, the average INTC stock price target of $37.39 implies a downside potential of 7.93% from current levels.
Bottom Line
Intel stands to gain from the recovery of the PC market and the introduction of new products. Additionally, Intel Foundry Services is well-positioned to benefit from the opportunities in the AI market. However, concerns about potential market share losses to competitors and the recent upswing in its stock price could limit the upside potential.
