The S&P 500 entered a new bull market, ending the longest bear streak since the 1940s. The surge in mega-cap tech stocks, easing inflation, stronger-than-expected corporate earnings and hopes that the Fed is nearing the end of
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Value Investor model based on the published strategy of Benjamin Graham. This deep value methodology screens for stocks that have l
There's a compelling argument that 2023 might be the year that artificial intelligence (AI) finally hits the mainstream. Recent advances in the field of generative AI have resulted in AI systems that can summarize text, write poems, successfully complete complicated tests, and ev
Nvidia is soaring on the heels of accelerating growth for AI chips, but the stock is already selling at an expensive valuation of 38 times trailing revenue. But even great companies can be lousy investments if you pay too much.
Companies joining the artificial intelligence (AI) market have experienced a bull run in 2023, with companies like Nvidia and Microsoft enjoying stock rises of 165% and 39% since Jan. 1. As a leading chipmaker with much to gain from the sector's development, Advanced Micro Device
Intel (
NASDAQ:INTC
) stock seems to be stuck in neutral, but a new focus on
artificial intelligence (AI) chips could help the company regain favor among analysts and investors. I am bullish on Intel stock, but be prepared to hunker down for a multi-year buy-and-hold strategy, as Intel's AI chip rollout will take a while.
Intel was once America's undisputed leader among chipmakers. Lately, however, Intel has lost market share to rival Advanced Micro Devices (
NASDAQ:AMD
). Plus, Nvidia (
NASDAQ:NVDA
) is 2023's market darling among chip manufacturers.
Consequently, INTC stock
has been range-bound all year, while other
semiconductor stocks have broken out to the upside. Furthermore, as we'll see, analysts are generally lukewarm on Intel. Still, an argument can be made that Intel will have its time in the limelight again, though probably not in the near term.
Intel Practically Throws in the Towel on Mobileye, Focuses on AI
As the old saying goes, it's better late than never. Intel ventured far afield of its core chipmaking business when the company invested in self-driving technology specialist Mobileye Global (
NASDAQ:MBLY
). Evidently, the results haven't been stellar, so Intel has wisely decided to
sell a substantial portion of the company's stake in Mobileye.
This should provide Intel with a capital infusion, but more importantly, it will enable Intel to focus on more high-confidence pursuits. Among those pursuits is developing chips that can accommodate the intense computational power needs of AI applications. This year, investors are enamored with Nvidia because the company has touted itself as a best-in-class manufacturer of graphics processing units (GPUs) for generative AI and other machine learning use cases.
It took a while, but Intel finally threw its hat into the AI ring and started giving the market what it wants. Not long ago, Intel shared its "portfolio of future [high-performance computing] and AI products," notably including Intel's Data Center GPU Max microprocessor series. In addition, according to
Reuters, Intel recently "provided a handful of new details on a chip for artificial intelligence (AI) computing it plans to introduce in 2025."
Intel's Surprising Potential Partnership with Nvidia
Now, I can hear the skeptics saying that 2025 is a long way away. That's a fair point, and INTC stockholders will need to be patient, as it will take a while for Intel to develop its new AI-ready hardware. However, it's encouraging that Intel could actually end up working with an industry rival that's a favorite among today's financial traders.
I'm referring to Nvidia, which (believe it or not) actually
praised Intel's test chips not long ago. Nvidia CEO Jensen Huang reportedly said, "We’re open to manufacturing with Intel. And [Intel CEO] Pat [Gelsinger] has said in the past that we’re evaluating their process, and we’ve recently received the test chip results of their next generation process and the results look good."
It would be a win-win for both companies' shareholders if Nvidia, the current AI hardware favorite on Wall Street, sourced components from Intel. Nvidia wouldn't have to rely on Taiwan Semiconductor (
NYSE:TSM
) as much, and Intel would gain a major customer and, in effect, a stamp of approval from a very popular company. However, these things take time, and INTC stock investors should maintain a multi-year time horizon, as these developments will likely play out over a span of years, not months.
Is INTC Stock a Buy, According to Analysts?
It looks like Wall Street has a fairly neutral outlook on Intel. On TipRanks, INTC stock comes in as a Hold based on five Buys, 17 Holds, and four Sell ratings. The average
Intel stock price target is $30.84, implying 3.1% downside potential.
If you’re wondering which analyst you should follow if you want to buy and sell INTC stock, the most profitable analyst covering the stock (on a one-year timeframe) is
Toshiya Hari of Goldman Sachs (
NYSE:GS
), with an average return of 8.41% per rating and a 59% success rate. Click on the image below to learn more.
Conclusion: Should You Consider Intel Stock?
I'm bullish on Intel stock, but it's not right for every investor. The market isn't likely to flip bullish on Intel this year, and 2024 might also frustrate short-term shareholders.
On the other hand, patient long-term investors should take a look at INTC stock. Intel is finally moving aggressively into the AI-focused hardware space, and if there's a partnership with Nvidia, Intel could be a favorite among tech traders someday.
Disclosure
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $1.8 billion dollar inflow -- that's a 1.0% increase week over week in outstanding u
Micron Technology MU announced the volume production availability of 96GB DDR5 registered dual in-line memory modules (“RDIMMs”) in speed up to 4800MT/s. This high-capacity memory designed for data center operations is qualified w
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Small-Cap Growth Investor model based on the published strategy of Motley Fool. This strategy looks for small cap growth stocks wit
Recent technological advances shed light on virtual reality (VR) in recent months, making it an industry worth keeping a close eye on. Meta Platforms and Sony have dominated the VR space with their respective headsets for years.
Advanced Micro Devices (NASDAQ: AMD) stock has delivered stunning gains of 84% so far in 2023, which may seem surprising given that the company's revenue and earnings are expected to shrink this year.
Dismal demand in certain end markets and high inflation are expected to drag down global semiconductor revenue by 10.3% in 2023, per the latest World Semiconductor Trade Statistics (WSTS) report. However, WSTS expects the industry to rebound in 2024 with an estimated growth rate of 11.8%. Growing demand for generative
artificial intelligence (AI) and the continued transition to the
cloud bodes well for the long-term growth of
chip stocks. We used
TipRanks’ Stock Comparison Tool to place Advanced Micro Devices (
NASDAQ:AMD
), Nvidia (
NASDAQ:NVDA
), and Intel (
NASDAQ:INTC
) against each other to pick the most attractive chip stock.
Advanced Micro Devices (NASDAQ:AMD)
Chip giant Advanced Micro Devices reported market-beating first-quarter
earnings last month, even as
revenue declined 9% year-over-year to $5.35 billion due to continued weakness in the PC market. First-quarter adjusted earnings per share (EPS) fell 47% to $0.60. Also, the company issued
weak Q2 guidance.
Nonetheless, CEO
Lisa Su assured investors that the company is confident about its growth in the second half of the year, as the PC and server markets strengthen. Moreover, AMD sees significant long-term opportunities to strengthen its data center and embedded segments and accelerate the adoption of its artificial intelligence (AI) offerings. Currently, rival Nvidia is stealing the spotlight when it comes to AI chips.
AMD also claimed in its Q1 earnings press release that it continues to lead the market in “confidential computing,” with major cloud service providers, including Microsoft (
MSFT
) Azure, Google (
GOOGL
) (
GOOG
) Cloud, and Oracle (
ORCL
) Cloud Infrastructure announcing new capabilities based on AMD EPYC processors.
Is AMD Stock a Good Buy?
On May 31, Bank of America Securities analyst
Vivek Arya increased the price target for AMD to $135 from $120, citing rising sector multiple. However, the
analyst reiterated a Hold rating due to total addressable market (TAM) headwinds related to x86, a chip architecture used in PCs and servers. Moreover, Arya believes that the company’s data center GPU portfolio remains in its early stages.
Overall, Wall Street’s Moderate Buy consensus rating on Advanced Micro Devices is based on 18 Buys and eight Holds. The average price target of $102.81 implies a possible downside of nearly 13% following a strong year-to-date rally of about 82%.
Nvidia (NASDAQ:NVDA)
Nvidia recently reported better-than-anticipated
earnings for the first quarter of Fiscal 2024 (April 30, 2023), despite a decline in the top line due to weakness in the gaming unit. The company’s
blowout Q2 guidance ignited an impressive spike in the stock. Nvidia expects Q2 FY24 revenue of $11 billion, plus or minus 2%, with the outlook being more than 50% higher than analysts’ consensus estimate of $7.15 billion.
Even prior to the Q2 outlook announcement, Nvidia shares advanced significantly on expectations of strong demand for its chips due to the buzz around OpenAI’s
ChatGPT and the aggressive initiatives by tech behemoths to capture the opportunities in AI.
NVDA stock has skyrocketed over 156% year-to-date.
Is NVDA Stock a Buy, Hold, or Sell?
On Wednesday, JPMorgan analyst
Harlan Sur reiterated a Buy rating on Nvidia following an investor group meeting with Simona Jankowski, the company's VP of investor relations.
The analyst said that Nvidia’s H100 shipments continue to generate higher volumes in Q2 and into the second half of 2023, even as the market for its A100 offering remains robust. Given the solid demand for its data center products and the impressive demand pull from generative AI, Nvidia has multi-quarter order visibility.
Additionally, Sur highlighted that the company's auto revenue pipeline stands at $14 billion and will unfold over the next six years. Sur thinks that Nvidia's automotive franchise should see a revenue inflection in the next two to three years, thanks to the revenue-sharing partnerships with Mercedes-Benz and Jaguar.
Nvidia scores Wall Street’s Strong Buy consensus rating based on 32 Buys and four Holds. The average price target of $449.92 implies 20% upside.
Intel (NASDAQ:INTC)
Despite a steep decline in revenue and
earnings, Intel managed to surpass analysts’ expectations for the first-quarter results for Fiscal 2023 (April 1, 2023). Q1 FY23
revenue declined 36% year-over-year to $11.7 billion and the company slipped to an adjusted loss per share of $0.04 from an adjusted EPS of $0.87 in the prior-year quarter.
Over the past few years, Intel has lost ground to players like AMD due to limited innovation, strategic missteps, and manufacturing delays. The company’s turnaround efforts could improve its prospects in the quarters ahead.
Recently, investors cheered Intel CFO
David Zinsner’s comments on the Q2 outlook at TD Cowen's 51st Annual Technology, Media & Telecom Conference held on May 31. Zinsner said that the company sees Q2 revenue at the upper end of its previous guidance range of $11.5 to $12.5 billion, tracking to reach $12 billion to $12.5 billion.
What is the Price Target for Intel Stock?
Following the recent CFO update, Deutsche Bank analyst
Ross Seymore reiterated a Hold rating on Intel and a price target of $32. The analyst said that he was pleased with this “mid-quarter update” striking a more positive tone, further showing that the company is turning the cyclical corner.
The analyst believes that the core debate for INTC will revolve around not only its ability to achieve five nodes in four years, but also its ability to drive improved revenue growth and profitability from these nodes. Seymore highlighted several concerns, including intense competition and the magnitude of investments required, which could impact Intel’s ability to improve its top and bottom line.
While Seymore was encouraged by the CFO’s favorable update on near-term trends, he maintained a Hold rating and a price target of $32, as he waits to gain more confidence in the longer-term structural questions about Intel.
Overall, Wall Street is sidelined on
INTC stock, with a Hold consensus rating based on five Buys, 17 Holds, and four Sells. The average price target of $30.84 implies a possible downside of 1.4%.
Shares have advanced over 18% since the start of 2023.
Conclusion
Despite a stellar year-to-date rally, Wall Street continues to see further upside in Nvidia. Analysts are more upbeat about Nvidia than AMD and remain sidelined on Intel. Robust potential for Nvidia’s GPUs due to AI-powered demand is expected to drive the stock higher. As per TipRanks’ Smart Score System, Nvidia scores a “Perfect 10,” implying that the stock could outperform the broader market over the long term.
Disclosure
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Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Value Investor model based on the published strategy of Benjamin Graham. This deep value methodology screens for stocks that have l
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