Intel (INTC), once a global powerhouse in the semiconductor industry, faced a nightmare in 2024, marked by a massive capital loss of almost $25 billion and a 33% decline in cash flow, leadership instability, and, in recent development, legal battles. As the company endures these ongoing challenges, investors, analysts, and Intel’s employees are all asking the same question: Can Intel get back on the horse and reclaim its former glory? Is there a light at the end of this ongoing dark tunnel?
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If you wish to read more on Intel’s struggles and future hopes, you can read what our writer at Tipranks, Bernard Zambonin, had to say about INTC’s prospects, or you can follow our news writer, Steve Anderson, for recent developments.
For now, though, let’s shortly examine Intel’s performance, other developments and the next steps required to get back on track in 2025:
Current Performance
Intel’s recent performance has been discouraging, to put it mildly. The company reported a significant decline in stock value, losing over 60% year-to-date. Nevertheless, Intel remains a key player in the semiconductor market, with a diverse portfolio that includes CPUs, GPUs, and AI solutions. After acknowledging that, the company’s dual business model of designing and manufacturing chips appears to be a double-edged sword, leading to high capital expenditures and operational inefficiencies. This caused the company to bleed so much money and post its depressing results.
Investors’ Sentiment
Investor sentiment towards Intel has been mixed. While some analysts maintain a neutral outlook, others see potential for a turnaround. The departure of former CEO Pat Gelsinger and the appointment of co-CEOs Michelle Johnston and David Zinsner have created uncertainty and a glimmer of hope for strategic realignment. Analysts like Oakoff Investments, a four-star analyst, believe Intel’s stock is undervalued and could soar with the right management and strategic focus on AI and data center products.
The Lawsuit
Now, for the latest soap opera twist, a shareholder derivative lawsuit has been issued against former CEO Pat Gelsinger and current co-CEO David Zinsner, adding more pressure to Intel’s wounds. The lawsuit alleges violations of securities law, fiduciary duties, and unjust enrichment related to Intel’s foundry business. Shareholders are seeking reparations and punitive damages, which, if awarded, would be paid to Intel itself.
Next Steps Required
Several steps are needed for Intel to navigate safely in this time of crisis. First, the company must resolve its leadership instability and clarify its strategic direction. Intel needs to decide whether to keep its current business model or separate its design and manufacturing operations. It must also improve its efficiency, cut costs, and invest in growing areas like AI and data centers. In addition, Intel must implement effective cost-cutting and focus on its core strengths.
Is Intel a Buy, Hold, or a Sell?
On Wall Street, Intel comes as a Hold. The average price target of INTC stock is $24.53, implying a 25.67% upside potential.
Conclusion
While Intel faces significant challenges, there is potential for recovery with the right strategic moves and leadership. There’s a long road ahead, with no end in sight, but with a clear vision and decisive action, Intel could once again shine in the semiconductor industry.
