AI chip stocks, including Intel (INTC), have recently been on the rise. While the overall market sentiment towards AI chips is positive, there are specific factors driving INTC’s rally that investors should consider before making any buying decisions.
Mizuho analyst Jordan Klein believes that the surge in AI chip stocks like INTC is mainly due to short-covering, rather than increased confidence in the company’s fundamentals. While Klein doubts that Intel will disappoint with its AI growth numbers, he also doesn’t see much upside potential in the near term.
Investors should be cautious about Intel’s valuation, which currently assumes significant growth in earnings as a result of the company’s AI chip launches. However, there is a high risk of correction if these expectations are not met, especially considering the uncertainties surrounding Intel’s Catalyst foundry.
Rather than following the current trend and buying into INTC, investors may want to consider staying on the sidelines. It’s possible that the recent rally is temporary, driven by short-covering rather than sustainable optimism. Waiting for a potential pullback to reassess the situation may be a prudent strategy.
Overall, Intel stock is considered a risky investment at this point, with potential challenges and uncertainties ahead. While there may still be opportunities for growth, investors should proceed with caution and consider the various risks associated with INTC before making any decisions.
Article Source
https://www.tradingview.com/news/investorplace:a3571b6cd094b:0-intel-stock-remains-a-questionable-ai-play-at-best-stay-away-for-now/
