Data News > Pre Market Movers: Intel Stock Faces Challenges Despite Positive Price Target Increase

Pre Market Movers: Intel Stock Faces Challenges Despite Positive Price Target Increase

By KlickAnalytics Data Insights  |   April 3, 2024 09:30AM ET

Key Points

- UBS raised its price target on Intel stock from $46 per share to $50 per share
- Intel's chipmaking shortcomings are evident in its latest financial results
- Intel shares fell 5% before the bell on Wednesday due to ballooning losses at its contract chip-making business
- Intel disclosed $7 billion in losses for its chip-making foundry in 2023
- Intel stock slumped more than 4% in early premarket after revealing its chip-making business lost more than $7 billion last year

UBS Raises Price Target on Intel Stock, Maintains Neutral Rating
UBS, a prominent Wall Street analyst, recently increased its price target on Intel stock from $46 per share to $50 per share. Despite this positive development, the firm maintained a neutral rating on the stock. This indicates that while UBS sees potential for growth in Intel's stock price, they are not overly optimistic about the company's overall performance.

Intel's Chipmaking Shortcomings Highlighted in Latest Financial Results
Intel's ambition to strengthen its presence in the semiconductor manufacturing sector is commendable, given the dominance of a few mega corporations in the industry. However, the company's latest financial results clearly demonstrate that achieving this goal is proving to be a significant challenge. This suggests that Intel is facing obstacles in its efforts to compete with other major players in the semiconductor market.

Intel Shares Fall Due to Contract Chip-making Business Losses
Before the market opened on Wednesday, Intel shares experienced a 5% decline. This drop was attributed to the substantial losses incurred by the company's contract chip-making business. The magnitude of these losses indicates that Intel may require several years to reach the level of profitability enjoyed by its competitor, Taiwan Semiconductor Manufacturing Co.

Intel Discloses $7 Billion Loss in Chip-making Foundry
In a significant setback for Intel, the company revealed that its chip-making foundry incurred losses amounting to $7 billion in 2023. This substantial financial loss underscores the challenges that Intel is facing in its chip-making operations. The disclosure of these losses has raised concerns about the company's ability to compete effectively in the semiconductor market.

Intel Stock Slumps After Revealing Significant Losses
Following the disclosure of the $7 billion loss in its chip-making business, Intel stock experienced a decline of more than 4% in early premarket trading. Despite the growing demand for AI compute, Intel's foundry business suffered increased losses, reaching $5.2 billion in the previous year. This downward trend in stock value reflects the market's apprehension about Intel's financial performance and its ability to navigate the challenges in the semiconductor industry.

In the face of UBS raising its price target on Intel stock, the company's chipmaking shortcomings and significant financial losses have cast a shadow over its prospects. The challenges Intel faces in its efforts to fortify its position in the semiconductor market are evident in its latest financial results, leading to a decline in stock value. As the company grapples with these obstacles, it remains to be seen how Intel will address these issues and regain investor confidence.

About INTC
Intel Corporation engages in the design, manufacture, and sale of computer products and technologies worldwide. The company operates through CCG, DCG, IOTG, Mobileye, NSG, PSG, and All Other segments. It offers platform products, such as central processing units and chipsets, and system-on-chip and multichip packages; and non-platform or adjacent products, including accelerators, boards and systems, connectivity products, graphics, and memory and storage products. The company also provides high-performance compute solutions for targeted verticals and embedded applications for retail, industrial, and healthcare markets; and solutions for assisted and autonomous driving comprising compute platforms, computer vision and machine learning-based sensing, mapping and localization, driving policy, and active sensors. In addition, it offers workload-optimized platforms and related products for cloud service providers, enterprise and government, and communications service providers. The company serves original equipment manufacturers, original design manufacturers, and cloud service providers. Intel Corporation has a strategic partnership with MILA to develop and apply advances in artificial intelligence methods for enhancing the search in the space of drugs. The company was incorporated in 1968 and is headquartered in Santa Clara, California.

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