New Intel Price Target After Surprise Nvidia Report
The troubled chip firm could receive a major boost from Nvidia and Broadcom, prompting a renewed stock price outlook.
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On a morning nearly devoid of corporate news, I saw the Intel INTC headline run across the tape.
Being long the name, based on the idea that the stock's performance had to improve after the dismissal of former CEO Pat Gelsinger, I took notice. Then the stock rallied to new highs as chatter hit Wall Street that Taiwan Semiconductor TSM and Broadcom AVGO were weighing separate deals to split the iconic tech company between them. After that, the hype around those potential deals died down a bit, and the semiconductors sold off last week. Intel, rudderless, of course, sold off with them.
On Monday morning, Reuters reported that both Nvidia NVDA and the above-mentioned Broadcom were carrying out manufacturing tests with Intel in what seems to be an effort to determine if these elite-level chip designers could trust the Intel foundry business to handle potentially hundreds of millions of dollars' worth of their business. There was no comment made by any of the parties involved, according to the report.
Another higher-end designer also taking a look at perhaps making use of Intel's foundry business is Advanced Micro Devices AMD. That would be somewhat ironic, because in the PC-based designer business, AMD and Intel are direct competitors and have a rivalry along the lines of something like the New York Yankees and the Boston Red Sox.
Intel Financial Results
Intel reported the firm's fourth quarter financial results back on January 30, 2024. The firm posted an adjusted EPS of $0.13 (GAAP EPS of -$0.03) on revenue of $14.26 billion for the period.
Even though the adjusted bottom-line print was good enough for a slight beat, the guidance was downright nasty. Intel projected current quarter revenue toward a range of $11.7 billion to $12.7 billion. At the time, consensus view was up around $12.9 billion. The firm also guided investors towards an adjusted EPS for the current quarter of $0.00, and a GAAP EPS of $-0.27. Wall Street had been looking for something more like an adjusted $0.09. So, there wasn't a lot to go on... unless one believes that the firm will be able to land a big fish as CEO or end up being divided up by its competitors.
Without that, with the design business being slapped around at the PC and gaming levels by AMD and being simply outclassed by Nvidia and others on the AI-capable/data center cloud forefront, the foundry business is going to have to do a better job of landing contracts. Right now, they have landed some business from Amazon AMZN, but not a lot else outside of the firm's internal business.
Recent Intel Stock Price Target
Two weeks ago, I wrote to you discussing a technical set-up that I had seen for this stock that I thought boded well for traders who were long the stock, like myself.
At the time, the stock was coming out of a "triple-bottom" pattern of bullish reversal with a $22.40 pivot. The last sale was $25.50 at the time and the stock had just retaken its 200-day SMA. I had a $31 target price. The stock peaked at $27.55 and then proceeded to give back that 200-day SMA.
So, What Now?
Yes, it is possible that I see this chart through the prism of an investor who is long the name. That said, unlike many INTC investors, I am up 16.3% on the position.
Readers will see that the stock is trying to take back that 200-day SMA on Monday morning after finding support at its 21-day EMA, which also happens to be near the pivot at the time. That makes the 200-day line our new pivot, which was mentioned as a potential back-up pivot in my mid-February piece.
Relative strength is off of the top of its range but has sustained a level of positivity since early last month. The daily MACD is close to sending a bullish signal, as all three components are above the zero bound at this time. The 12-day EMA and 26-day EMA are battling for supremacy. If you are long INTC, you are rooting for the 12-day EMA.
Intel (INTC) Target Price
Target Price: $33 (up from $31)
Pivot: $24.40 (200-day SMA)
Add: Down to 50-day SMA ($21.20)
Panic: New low below the triple-bottom pattern
At the time of publication, TheStreet Pro Portfolio was long INTC, NVDA and AMZN equity.
