Shareholders of the chip maker Intel (NASDAQ:INTC) breathed a sigh of relief as a U.S. appeals court overturned the $2.18 billion patent-infringement verdict looming over the company. To provide context, VLSI Technology filed a lawsuit against Intel for patent infringement in April 2019. The initial trial resulted in a jury awarding VLSI $2.18 billion, finding that Intel had violated two patents owned by VLSI.
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However, on Monday, the U.S. Court of Appeals for the Federal Circuit determined that there was insufficient evidence for the jury to establish Intel’s infringement of one of the two patents, which accounted for $675 million of the total award.
Meanwhile, the court acknowledged Intel’s infringement of another VLSI patent. Nevertheless, the appeals court raised concerns about the damages analysis, prompting a verdict for a new trial to determine the appropriate compensation. Notably, in the initial verdict, the jury granted VLSI $1.5 billion in damages for patent infringement.
With this background, let’s look at the Street’s recommendation for INTC stock.
What is the Prediction for Intel Stock?
So far, 2023 has turned out to be a solid year for INTC’s shareholders. Intel stock has gained nearly 63% year-to-date. Meanwhile, the company will likely benefit from the recovery in the PC market, new server product launches, and the expansion of its foundry ecosystem. Further, the court’s decision to reverse the $2.18 billion patent infringement case adds to the positives.
Nonetheless, INTC stock has gained significantly, implying that positives are already reflected in its share price. Also, increased competition from Advanced Micro Devices (NASDAQ:AMD) in the traditional CPU market poses challenges.
With five Buy, 18 Hold, and four Sell recommendations, Intel stock has a Hold consensus rating. Further, analysts’ average price target of $37.39 implies a downside potential of 11.71% from current levels.
