It was another blow for chip stock Intel (INTC), as shareholders rose up in a large body and filed suit once again over its foundry aspirations. Shareholders also sold off shares, possibly to cover legal costs, and sent shares down fractionally in Thursday afternoon’s trading.
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A report from The Register notes that Intel is now facing a “derivative lawsuit” that is pursuing both board members and several company executives. Specifically, both former CEO Pat Gelsinger and current co-CEO David Zinsner are on the hot seat this time, for “…violating securities law and their fiduciary duties, unjust enrichment and wasting corporate assets.”
The suit is pursuing restitution and punitive damages, which would be paid to Intel itself in the event that the shareholder suit went the shareholders’ way. Indeed, the legal filing itself lists the recent compensation of the defendants, including the $207 million that Gelsinger received over the period between 2021 and 2023. At its base, the suit focuses on the foundry business at Intel, which has been in rough shape largely since its inception. The suit notes that there was “inadequate risk disclosure” involved, which cost shareholders and Intel big in the process.
Having a Hand in Trusted AI
However, Intel is also involved in building the next generation of trusted artificial intelligence (AI). The combined force of Intel, Nvidia (NVDA) and EQTY Lab has produced the first of their kind certificates of authenticity and compliance when it comes to AI training.
Known as the Verifiable Compute AI framework, it is a hardware-based solution, noted a Business Wire report, that helps ensure that released AI meets a set of standards that makes it “…explainable, accountable and secure at runtime.” This in turn should go some way toward making AI a more trustworthy platform. By extension, that should also, hopefully, put to rest fears about creating another “potential Skynet,” which has been an issue ever since AI started becoming available commercially.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 21 Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 57.51% loss in its share price over the past year, the average INTC price target of $24.53 per share implies 28.26% upside potential.
