Remember last week, when new word came out about interest in buying chip stock Intel (INTC)? We have known for some time that there has been interest in buying Intel outright, particularly from chip stock Qualcomm (QCOM). But now, new reports suggest that there may be one more name to add to the growing roster of potential Intel buyers: Elon Musk. That news gave shares an extra 2.5% in Tuesday afternoon’s trading.
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The report noted that, just over the weekend, a combined force of Qualcomm, GlobalFoundries (GFS) and Musk got together at Mar-a-Lago ahead of the Trump inauguration and talked business. Intel’s long-term survival is vital to the United States as a whole, because it represents such a significant part of the United States’ chip production.
The notion of Musk taking a hand in Intel suggests some key possibilities, like a pivot to artificial intelligence (AI). Musk, via Tesla (TSLA), has already been seen getting more involved in AI. Thus, getting Intel harder into AI—which was frequently cited as a key failing of Intel’s over the last five years that gave its competitors an opportunity to surge ahead largely unchallenged—would likely prove a positive growth factor.
A Winning Partnership
On the other side, meanwhile, Intel is making headway as a result of a partnership effort that is bearing fruit. Its work with United Microelectrics Corporation (UMC) has been working toward a project in Arizona, and efforts are “progressing as planned,” the report noted.
The project boils down to a production line in Arizona, the report noted, and United Microelectrics is currently testing the product of that line to see how well it actually works. Should all go as planned, the report notes, full-scale production will follow, and we will likely find out more about the product and how much impact it will have on Intel’s bottom line. Much of that, right now, is being held close to the vest.
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 four Sells assigned in the past three months, as indicated by the graphic below. After a 53.7% loss in its share price over the past year, the average INTC price target of $24.42 per share implies 11.03% upside potential.
