Intel's stock has declined 38% this year, facing challenges in AI and as a foundry player.

From Nasdaq: 2024-07-02 22:53:54

Intel stock (NASDAQ: INTC) has declined by about 38% this year, while rival AMD stock (NASDAQ: AMD) has gained 17%. Concerns about Intel’s future in generative AI and as a major foundry player persist. Intel is focusing on AI accelerators and competing on price. The company’s stock has suffered a 40% decline, contrasting sharply with the S&P 500’s 45% gain.

Generative AI trends pose challenges for Intel’s server business, with increasing demand for tailor-made graphics processors over central processing units. Intel is looking to compete with new AI accelerators like Gaudi 2 and Gaudi 3. The company’s plans to become a leading foundry player face obstacles due to manufacturing missteps and delays in wafer production, with estimated recovery not until 2027.

Despite recent declines, Intel’s stock could benefit from the PC market recovery post-Covid, with IDC forecasting a 2% rise in PC shipments this year. Private equity interest in Intel’s manufacturing capacity expansion could reduce risks in its foundry business venture. Valued at $41 per share by Trefis, Intel’s trading at approximately 28x consensus 2024 earnings and 16x consensus 2025.



Read more at Nasdaq: Will Intel’s AI and Foundry Bets Reverse The Stock’s 38% Slump This Year?