As it turns out, chip stock Qualcomm (QCOM) may still have an interest in buying part or all of fellow chip stock Intel (INTC). But whatever way Qualcomm plans to go therein, we will not hear one way or another until after the November United States presidential election. There are some good reasons for this, but it did Intel few favors, as its shares were down modestly in Wednesday afternoon’s trading.
Basically, Qualcomm wants to know what the regulatory environment will look like before it pursues any kind of merger and acquisition (M&A) activity with Intel, reports note. Whether it will likely be four more years of the same under Harris, or a return to 2016 with Trump, the two outcomes will likely mean something very different for Qualcomm and Intel.
Certainly, there would be some level of regulatory scrutiny. While Intel is not as potent as it once was, the combination of it and Qualcomm certainly would remove at least some level of competition from the field. It would make Qualcomm quite a bit stronger to have Intel’s PC business on its side, but that may make it too strong for some regulators.
China Claps Back
Meanwhile, the Chinese are starting to put the shoe on the other foot. While the United States has made several products—like those from Intel—unable to be shipped to China, now, the Chinese are conducting their own security reviews of Intel products that are actually still available in the country.
The Cybersecurity Association of China noted that Intel has “constantly harmed” the country, particularly its national security interests. As for how, the organization noted that Intel processors have “…major defects when it comes to product quality, security management, indicating that it is extremely irresponsible attitude toward consumers.” Further, the group asserted that all Intel processors are vulnerable to intrusion by the National Security Agency (NSA) in the United States.
Is Intel a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 36.85% loss in its share price over the past year, the average INTC price target of $25.38 per share implies 13.18% upside potential.
