Investors in the chipmaker Intel have been disappointed with the stock’s performance over the past three years, as it has lost 45% of its value while the broader semiconductor sector has seen exceptional returns. Market share losses to competitors like AMD have weighed on Intel’s revenue and profits, leading to a decline in investor confidence. However, the company’s recent first-quarter results show signs of improvement, with revenue rising 9% year over year and a return to profitability.
Intel’s growth in the first quarter was driven by strong performance in its client computing group and data center and artificial intelligence segment. The company is capitalizing on the growing demand for AI-enabled PCs and server processors, with estimates showing that AI-enabled PCs will account for 60% of total PC shipments by 2027. Intel’s Core Ultra processors are being used in millions of AI-enabled PCs and the company expects to ship more as demand grows.
Furthermore, Intel is entering the AI data center accelerator market with its Gaudí 3 accelerator, which aims to compete with industry leaders like NVIDIA. The company has also secured advanced chip manufacturing equipment from ASML, allowing it to potentially narrow the technology gap with rivals in the future.
Analysts expect Intel’s revenue growth to improve in the coming years, which could lead to better stock performance. Currently trading at a discount compared to the US technology sector, Intel may see its valuation increase if its growth accelerates. Investors interested in semiconductor stocks may want to keep an eye on Intel and consider buying if there are consistent signs of improvement in the company’s performance.
Article Source
https://www.fool.com/investing/2024/06/20/where-will-intel-stock-be-in-3-years/
