Like many other technology stocks, Intel (NASDAQ:INTC) has been buffeted by the one-two punch of the DeepSeek revelations and Trump tariffs, which threaten to throw the international trade system into chaos.
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While the timing is never ideal for a global meltdown, this comes at a particularly troublesome juncture for Intel. The company – which lost over 50% of its value in 2024 – remains in the red during the current year as well.
But it’s not all doom and gloom. Intel’s latest Q4 2024 earnings brought a glimmer of hope, with both revenue and earnings beating expectations. The company pulled in $14.26 billion in revenue – outpacing forecasts by $434.19 million – while its non-GAAP EPS of $0.13 edged estimates by a cent.
However, the road ahead looks bumpy. Intel’s Q1 2025 outlook paints a less-than-rosy picture, with projected revenue between $11.7 billion and $12.7 billion – a sequential drop of 11% to 18% from the previous quarter. Moreover, with a midpoint of $12.2 billion, the forecast falls about 5% short of Wall Street’s $12.87 billion consensus.
A mixed bag, no doubt. But could Intel be on the brink of a turnaround? One top investor, known by the pseudonym JR Research, isn’t convinced.
“Intel has not convinced me that it has what it takes to overcome its technological struggles,” explains the 5-star investor, who sits in the top 2% of TipRanks’ stock pros.
Intel’s move to decrease capex during this year does not exactly project confidence, notes JR, especially when contrasted with TSMC’s decision to move in the opposite direction. This could indicate that Intel may not have the wherewithal to benefit from any protectionist policies that are designed to boost domestic chip manufacturing, points out the investor.
There is also, of course, the other side of the brewing trade brouhaha, which could hit both semiconductors directly and the supply chains necessary to manufacture them, notes JR.
“We still do not have enough information yet to determine whether that could affect Intel’s client computing opportunities, but I believe the losses on INTC in January likely point to assessed downside risks,” the investor admits.
JR is hard-pressed to find reasons to be optimistic that Intel can succeed in catching up in the AI GPU segment, expecting INTC to remain behind Nvidia and AMD (as well as custom chip designers Broadcom and Marvell) for the foreseeable future.
“I’ve not assessed much of a catalyst that suggests Intel Corporation could remain or even improve its competitiveness sufficiently against its arch-rivals to convince me to upgrade my rating,” concludes JR Research, who rates INTC shares a Hold (i.e. Neutral). (To view JR Research’s track record, click here)
Wall Street emphatically feels very much the same. With 1 Buy, 26 Hold, and 5 Sell recommendations, INTC is firmly in the consensus Hold classification as well. However, its 12-month average price target of $21.92 implies ~15% upside potential from current levels. (See INTC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
