Intel’s Struggles: Can the Tech Giant Turn Things Around?
Intel INTC shares have faced significant challenges in 2024, dropping more than 50% and failing to align with the semiconductor industry’s upswing. Quarterly results have contributed to this downturn, leaving the stock with little momentum after earnings.
Below is a chart showing Intel’s year-to-date performance compared to the S&P 500, with quarterly releases marked by circled arrows.
Image Source: Zacks Investment Research
With such a steep decline from its previous highs, is it time to consider buying Intel shares? Let’s examine the situation further.
Intel’s Dismal Forecast
Currently, Intel has a Zacks Rank #4 (Sell), which reflects analysts’ pessimistic earnings estimate revisions. Expectations for its current fiscal year have deteriorated sharply, with the Zacks Consensus EPS estimate falling 85% to $0.27 compared to last year.
These downward revisions, stemming from disappointing quarterly results, predict a tough path ahead for the stock.
Image Source: Zacks Investment Research
Despite this, Intel’s CEO Pat Gelsinger shows confidence. In early August, he purchased 12.5k shares totaling about $250k right after the quarterly release. He acknowledged that the second half of the year is proving more difficult than expected but believes Intel can regain market strength.
Additionally, cost-cutting strategies have been a primary focus. After facing margin pressures, Intel announced a $10 billion cost-savings target in August.
Please note that the following chart analyzes a trailing twelve-month basis.
Image Source: Zacks Investment Research
For the time being, investors may want to remain cautious. Positive earnings revisions are crucial indicators of changing sentiment. The earnings expectations for the upcoming release on October 24th have already been significantly reduced, with anticipated losses of -$0.03 per share.
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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Interestingly, INTC shares have gained nearly 20% in the past month, but this rally may be largely due to a short squeeze driven by buyout rumors.
For those interested in semiconductor stocks, alternatives like Nvidia NVDA present a more positive outlook. Nvidia currently holds a Zacks Rank #2 (Buy), with rising earnings expectations following impressive quarterly results.
Nvidia’s sales are projected to more than double in its current fiscal year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
