That Intel (INTC) remains a semiconductor giant is beyond argument. However, there’s is no doubt the once undisputed market leader has lost some of its luster and market positioning. In what has overall been a bountiful year for semiconductor stocks, Intel’s problems have been well documented. Delays to the release of the company’s next-generation 7nm chips, and superior products from its rivals have resulted in the stock underperforming. To wit, shares are down by 15% year-to-date.
However, it would be foolish to write off Intel just yet. With a new logo in tow (only the third such change in its history), the company has just announced a new line of laptop processors.
The 11th generation processors are based on the company’s Tiger Lake architecture and appear to be targeting gamers and the premium end of the market.
Deutsche Bank analyst Ross Seymore believes the new gamer focused processors signal “a bigger shift in the industry.”
Interestingly, Seymore notes, unlike previous new releases when Intel compared its new product’s performance to previous Intel models, the company has highlighted how the line up compares to AMD’s processors (Intel is better, they claim – naturally). AMD has been steadily eating away at Intel’s market dominance and the question now is: Can Intel claw back its once undisputed CPU leader’s title? Seymore is not sure.
“With INTC and AMD both claiming notebook design wins in over 50 SKUs in the coming months, competitive intensity in notebook CPUs is building/intensifying to the highest level seen in years. However, bigger questions remain, as we heard little that will meaningfully reduce longer-term investor concerns surrounding INTC’s manufacturing execution following the company’s 7nm delay announcement during earnings a month and a half ago. Consequently, we continue to expect INTC’s existing product roadmap to deliver highly competitive products over the next ~2 years, but believe investors will be hesitant to reward such performance until INTC better clarifies its longer-term manufacturing plans (internal vs. external) and the resulting financial implications (lower GM/opex/capex trade-offs etc.),” the 5-star analyst opined.
For now, then, Seymore keeps a Hold rating on INTC shares, alongside a $60 price target. The implication for investors? Upside of 20% from current levels. (To watch Seymore’s track record, click here)
Seymore’s colleagues adopt a similar position. The analyst consensus rates Intel a Hold, based on 8 Buys, 14 Holds and 9 Sells. The average price target clocks in at $56.58 and implies shares will appreciate by 13% over the following months. (See Intel stock analysis on TipRanks)
To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
