It’s almost axiomatic now, but whenever a company announces big layoffs, shares go up. The combination of hefty cost savings and a willingness to “do the tough thing” tends to help investors’ perception of a company’s stock. And that’s what happened to chipmaker Intel (INTC) today, as the announcement of a new chip, coupled with word of hefty layoffs, sent shares up over 2% in Wednesday afternoon’s trading.
The reports noted that Intel is planning job cuts in the “thousands” in a bid to lower costs and give it more resources to recover from market share losses. Intel has been pouring a lot of cash into research and development operations lately as it works to recover its former dominance in the chip market.
With numerous competitors emerging to take a slice of Intel’s market share, the firm is hoping a combination of new and better chips, along with plans to make them mostly in-house, will help re-establish its dominance.
All That and a Whole New Chip
Meanwhile, Intel also plans to roll out a new line of Core Ultra chips in the near future. Just after Labor Day, on September 3, Intel will launch its “Lunar Lake” line of Core Ultra chips. Intel has been actively promoting these chips for the last year, and now, a formal launch date has been established.
Further, this is Intel’s attempt to win back the title of “most efficient PC laptop system on a chip (SoC),” so there will be plenty of eyes on it to see if it can produce the kind of results that users are hoping for. Early reports suggest that there will be substantial updates to Intel’s chip architecture as a result of the new Lunar Lake line, so it may have a credible case for taking back its old title after all.
Is Intel Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on three Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 13.25% loss in its share price over the past year, the average INTC price target of $40.21 per share implies 30.28% upside potential.
