While things haven’t exactly been great for chip stock Intel (NASDAQ:INTC), the last thing that it needed was a major new competitor in one of its key markets. But that’s what happened today, as Nvidia (NASDAQ:NVDA) took aim at the home PC market. That was enough to send Intel into a bit of a tailspin, dropping nearly 4.5% in Thursday afternoon’s trading.
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Nvidia’s earnings report delivered amazing results, and it took the opportunity to spike the ball in the end zone, figuratively, by making clear it was going for the personal computer market. It’s the “AI PC” concept, and if there’s one thing Nvidia can do particularly well right now, it’s building infrastructure for anything AI-related.
Granted, Nvidia already had a little bit of a foothold in Intel’s market. Nvidia graphics cards have been part of the gaming PC market for decades now; the 25th anniversary of the GeForce 256 is this October, after all. And with Microsoft (NASDAQ:MSFT) showing off the “CoPilot PC,” it’s clear that Nvidia will have a lot more to do with the home PC market than it ever has.
Building New Markets
But at least Intel isn’t quietly letting its market share erode, as it’s been working on building new business lines. Intel is now regarded as the king of the intelligent cockpit market in China. Intel will be bringing its software-defined vehicle (SDV) system-on-a-chip (SoC) system to a coalition effort between itself, Neusoft, and ThunderSoft to build intelligent cockpit systems for vehicles so that drivers can better interact with them.
This could be a pretty brisk market, considering the rapid growth of personal vehicles in China. But considering what we’ve already seen happen to the Chinese market—both internally and externally—this market may not make up for losses in the home PC market.
Is Intel a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on three Buys, 26 Holds, and three Sells assigned in the past three months, as indicated by the graphic below. After a 5.38% rally in its share price over the past year, the average INTC price target of $37.87 per share implies 26.07% upside potential.
Is INTC the Right Stock to Buy for Passive Income?
Before you hurry to invest in INTC, think about the following:
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