Intel’s stock has seen a significant decline in 2024 after experiencing a surge in value the previous year. Investors initially flocked to Intel in 2023 due to its low valuation and potential to compete with Nvidia. However, three key reasons suggest that Intel’s stock may continue to suffer losses.
Firstly, Nvidia’s dominance in the market with its advanced artificial intelligence chips, particularly the Blackwell series, puts Intel at a disadvantage. Intel’s Gaudi-3 chip series, while a competitor to Nvidia’s older chips, will not be available until later in the year.
Secondly, there is a growing sense of “AI fatigue” among investors, leading to concerns about the concentration of AI stocks in their portfolios. As a result, investors may start scrutinizing the quality of earnings from companies supposedly linked to AI, which could negatively impact Intel.
Lastly, while Intel’s stock trades at a discount compared to competitors like Nvidia, this low valuation may be justified given Intel’s struggles to keep up in the AI chip sector. Despite the discount, it is unlikely to lead to a significant increase in Intel’s valuation multiple.
Overall, Intel’s stock performance in 2024 reflects a challenging period for the company as it faces stiff competition in the AI chip market and investor fatigue surrounding AI stocks. Investors should be cautious when considering investing in Intel, as the company may continue to face challenges in the future.
Article Source
https://investorplace.com/2024/07/intels-ai-dream-turns-nightmare-3-reasons-intc-stock-could-crash-further/
