Intel Stock Takes a Hit as Analyst Snubs Company in Favor of AI Competitor
Technology stocks opened the year with a selloff, as the hype around artificial intelligence drove big gains ahead of actual business growth. Shares of Intel (NASDAQ:INTC) took a hit, falling as much as 5.6% in early trading. As of 3:35 p.m. ET, the stock was down 5.19%. This decline was part of the broader market downturn to start the year, but a Wall Street analyst also added fuel to the fire.
Issuing a higher price target, the analyst doesn’t view Intel as one of the “attractive” chip stocks heading into 2024. Stifel analyst Tore Svanberg maintained a hold rating on Intel, but increased his price target to $45 from $38. While this may seem like good news, it suggests a potential downside of 10% compared to Friday’s closing price. Svanberg laid out criteria for the semiconductor stocks he views as “attractive,” and Intel didn’t make the cut.
The analyst believes that the ideal mix for a chip stock includes being down from recent highs, having a strong balance sheet, and being well-positioned to benefit from the ongoing AI revolution. Svanberg’s top pick among AI stocks is Nvidia, which he calls his “best idea” for AI and accelerated computing. He believes that Nvidia presents a compelling opportunity ahead of the next phase of the company’s AI cycle, software, and services.
Not everyone agrees with the analyst’s decision to snub Intel. Argus analyst Jim Kelleher maintained a buy rating on Intel shares and raised his price target to $60 from $42. This suggests a potential upside of 19% compared to Friday’s closing price. Kelleher cited Intel’s position in the data center and niche markets, such as the Internet of Things and applications acceleration, as reasons to buy.
Soaring in 2023, Intel stock has been essentially flat over the past five years. The stock remains a mixed bag, and there are better ways to play the AI revolution. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now, and Intel wasn’t one of them. The 10 stocks that made the cut could produce significant returns in the coming years.
Intel’s stock took a hit after a Wall Street analyst snubbed the company in favor of its AI competitor.
