Intel (NASDAQ:INTC) appears to be at a critical “fork in the road,” as Yogi Berra once famously said. The Silicon Valley giant has been losing ground in recent years, leaving investors to wonder: Is it poised for a turnaround, or is it set to continue its downward slide?
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Unlike many tech leaders, Intel was slow to capitalize on the AI boom, missing out on the most lucrative opportunities this groundbreaking technology has brought.
Yet, despite a 47% drop in share price this year, Intel has recently surprised the market. Over the past five trading days, the stock has surged 22%, fueled by a Q3 earnings report that beat revenue expectations and included an upward revision in Q4 guidance.
This recent news has left one investor, known by the pseudonym The Value Edge, imbued with optimism that INTC is on the cusp of taking the right path forward.
“This quarter is likely the inflection point for the company as they put major restructuring and impairment charges in the rearview mirror and look forward to ramping new process nodes and technologies,” the investor opined.
For one, for the first time in many years, Intel’s 18A node will be able to compete technologically with Taiwan Semiconductor Manufacturing Company (TSMC), writes Value Edge. Further boosting the excitement around 18A, Intel is partnering with Amazon Web Services on an ‘AI fabric chip’ developed on this advanced node.
The investor also highlights that Intel is working on a long-term megadeal with Amazon, aiming to produce a custom Xeon 6 chip on Intel 3 as well as the AI fabric chip on 18A. This could serve as a “critical early win” for Intel if they are able to successfully finalize the deal in 2025.
These developments could set up a “very successful year” in 2025, the investor sums up, noting, “If there was ever a time for Intel to leapfrog TSMC it’s right now.”
To this end, Value Edge rates INTC a Buy, as the “stock is now worth the risk.” (To watch The Value Edge’s track record, click here)
The investor’s optimism is far from the norm over on Wall Street. With just 1 Buy, 23 Hold, and 7 Sell ratings, INTC holds a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $24.43 implies a ~7% downside from current levels. (See INTC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
