Intel (INTC) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Semiconductors, and Nvidia in particular, find themselves at the heart of the tension between the world's two biggest economies.
Intel's Q1 results were relatively weak. The rising macro risks might affect its sales and costs in the following quarters. Intel remains a SELL for us right now.
Intel reported better-than-expected Q1 earnings despite no revenue growth, with adjusted EPS of $0.13 and revenues of $12.7B, beating estimates. Intel's restructuring is ongoing: the chipmaker sold a majority stake in Altera and focuses on core processor manufacturing for consumer and Data Center markets. Generative AI spending trends heavily work in favor of the chip-making industry.
Despite solid traction in the AI PC market and portfolio expansion, INTC's growth prospects are affected by stiff competition, high debt levels and geopolitical volatility.
Trading near its 52-week low around $20, Intel NASDAQ: INTC presents a seemingly inexpensive investment in the semiconductor sector as we near the middle of 2025. This low valuation, however, clashes with Intel's analyst community's cautious consensus rating and a weak financial outlook following a better-than-expected first quarter.
Intel shareholders on Tuesday approved a company measure aimed at topping up share reserves to attract and retain new employees and compensation for new CEO Lip-Bu Tan.
Intel's current financial performance is poor, but Q1 2025 results exceeded expectations, with revenue at $12.67 billion and a gross profit margin of 39.2%. I recommend buying Intel stock, valuing two scenarios: maintaining the vertical model and selling the foundry business, with potential values of $28 and $55 per share, respectively. Intel's strategic challenge lies in managing both design and manufacturing; selling the foundry business could simplify operations and boost profitability.
When it comes to investing in artificial intelligence (AI), buying shares of graphics processing unit (GPU) manufacturers like Nvidia (NVDA 2.33%) and Intel (INTC 3.00%) can be a wise decision. Nearly every AI application requires these specialized chips to function, and buying stock in a GPU maker gives your portfolio direct exposure to the entire AI industry.
Intel's turnaround under the new CEO has started, but the full recovery is expected to extend well into 2026. Q1 2025 results showed a slight revenue decline but beat estimates; however, gross margins and profits continue to struggle. INTC's divestiture of 51% of Altera aims to improve the balance sheet, despite Altera's valuation being nearly halved since its acquisition.
One of my main concerns is the delay of Clearwater Forest to 2026 as it removes a key catalyst for Intel's data center segment this year. I find Intel's margin pressure persistent, with 18A startup costs and Lunar Lake likely weighing for the rest of 2025. I like Intel's planned $6B OpEx cut through 2026, but I don't see it reversing the stock's decline without stronger (near-term) revenue catalysts.
Intel's (INTC -0.97%) new CEO told investors that the turnaround will take time.