It probably should have been a little better day for chipmaker Intel (INTC) than it turned out to be. Despite a patent win and a little extra good will from Ohio-area drivers, Intel stock still took a nosedive and landed down nearly 5.5% in Thursday afternoon’s trading.
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The good news for Intel, immediately, was that it won a patent lawsuit between itself and R2 Semiconductor. At least, it won in the United Kingdom. The bad news on that one is that Intel has three other lawsuits to go in France, Germany, and Italy, and only the German one was there previously.
The lawsuit was over a patent that R2 Semiconductor owned, which deals with voltage regulation systems, and Intel was alleged to have infringed on it. The UK court didn’t go with that, but R2 may yet win in one of three other courts. Intel reportedly used the technology in question in its 10th, 11th, and 12th-generation chips, which means that it didn’t play a part in the latest issues of stability in some Intel chips.
Traffic and Layoff Concerns
In a separate development, Intel may be on the cusp of winning a little good will back from Ohio drivers, as the last of its “extra-large super loads” is about to head out and reach its foundry site in Licking County. The bad news is that the timing on this one is awful, as it’s set to coincide with the Ross County Fair and the Scioto County Fair, making for likely traffic snarls.
Meanwhile, there are also concerns that Intel’s huge new layoff move may prove too little too late. While Intel’s plan to fire a huge number of employees will certainly take some pressure off in the short-term, there are still several underlying issues that need to be addressed. The biggest among these might be the sheer amount of competition Intel has in the chip market, and how Intel doesn’t seem to have much more than incremental improvements to take them on.
Is Intel Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy 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 14.11% loss in its share price over the past year, the average INTC price target of $40.21 per share implies 38.82% upside potential.
