2024 has not been a good year for Intel in the midst of the competition for artificial intelligence. The firm has lost more than half of its stock market value and Wall Street analysts recommend keep awayyes, according to Kara Greenberg en Yahoo Finance.
Analysts have suggested that the appointment of a new CEO and changes to recovery plans from Intel could be catalysts to short term for actions. But they also say that business challenges that the historic chip maker faces could take months, or yearsto be resolved.
“The situation here is likely to continue to get worse before it gets better,” wrote the Bernstein analysts after the departure of former CEO Pat Gelsinger at the beginning of December.
As Intel searches for a new CEO, the company’s path forward is likely to evolve. Gelsinger had been an advocate of maintaining Intel’s contract manufacturing and foundry businesses as part of its turnaround effort. Now analysts suggest that a breakup of its operations could be more likely. (Rumors to that effect occasionally boosted Intel shares earlier this year.)
In a presentation to investors earlier this month, the interim co-CEOs Dave Zinsner and Michelle Johnston Holthaus called the possibility of a complete separation of Intel’s foundry business a “open question for another day”, according to a transcript provided by AlphaSense.
Wall Street is generally cautious about Intel shares, with 13 of the 16 analysts followed by Visible Alpha with ten “hold” ratings and three “sell” ratings. Still, there is a certain degree of optimism: his consensus target pricecurrently around 24 dollarsrepresents a premium of approximately 19% to recent prices.
Los Bank of America analysts they wrote earlier this month that a spinoff could now become more likely. However, analysts also said that much of Intel’s recovery could still depend on the foundry business, which will receive billions of dollars in funds from the CHIPS Act linked to the fulfillment of manufacturing milestones.
While a spin-off could benefit shareholders in the short term, Wedbush analysts wrote recently, it would not solve Intel’s biggest problems in demonstrating its competitiveness, citing the “lagging position” of the company in both the design and production of chips.
and the Bernstein analysts last week they advised investors to “stay away”.
Intel It closed on Monday higher at $20.21. The 70 period moving average above the last fourteen candles, RSI up at 40 points and MACD lines above the zero level.
Medium-term resistance is at $26.43. Meanwhile, Ei indicators are mostly bearish.