Intel Stock: Intel plunges as PC market hurdles push chipmaker further behind in AI race.
Based on its stock price of $44.39, Intel is expected to lose approximately $22 billion in market value if premarket losses continue. The stock price soared 90% in 2023.
The outlook for Nvidia, Advanced Micro Devices, Qualcomm and Micron Technology, among the largest PC chip suppliers, fell between 0.6% and 1.7%.
Analysts say that while many companies in the chip sector have been going strong recently, concerns about falling behind in the data center AI race have made Intel an exception.
“It looks like AI is everywhere except Intel,” said Hans Mosesmann, an analyst at Rosenblatt Securities who issued a sell rating.
The lack of a recognizable AI growth vector moving the dial “points to another transitional year.”
The chipmaker said it expects revenue for the current quarter to be more than $2 billion short of market estimates. “As chips from the likes of Nvidia and Advanced Micro Devices play an increasingly important role in the data-hungry AI industry, there is a risk that Intel will be left behind,” said Russ Mould, investment director at AJ Bell.
Intel is not yet competitive in the AI-specific chip market, but its central processing units (CPUs) are often used in conjunction with Nvidia’s AI chips, and a third of Intel’s server CPUs are currently sold as part of AI systems.
Some analysts remained positive on the stock, with at least 11 brokerages increasing their price targets to $42, according to LSEG data.
“The company will still win its AI bet over the long term. Margins look solid, which means CEO Pat Gelsinger’s plans will still be executed, albeit at a slower pace,” said Thomas Monteiro, senior analyst at Investing.com. .
Intel’s stock is trading at about 28 times forward 12-month earnings estimates, compared to 45.08 times for AMD and nearly 30 times for Nvidia, according to LSEG data.
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