Chip stock Intel (INTC) is not in the top 10. Intel CEO Lip-Bu Tan made that abundantly clear just last week. And with layoffs mounting, divisions getting sold—in part or in whole—and Intel seemingly circling the drain, some are starting to wonder if this is the part where Intel becomes the next BlackBerry (TSE:BB). The news did little for Intel shareholders, as shares slipped fractionally in Monday afternoon’s trading.
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The numbers Intel faces are disastrous if not outright catastrophic. Back in 2023, the global market for AI chips was $23.2 billion, and that was two years ago. By 2029, reports suggest the market will be worth $117.5 billion, making for a compound annual growth rate of somewhere around 31%. And given that Nvidia (NVDA) has about 90% of that market for itself, that leaves Intel in a terrible position: either compete for the crumbs that represent second place, or try to pull market share from an entrenched operation that has first-mover advantage.
Worse, other competitors are already starting to make second place look impossible. With Advanced Micro Devices (AMD) gaining with its MI300 line, and Taiwan Semiconductor Manufacturing Co. (TSM) currently serving as Nvidia’s primary manufacturer, the end result leaves Intel few places to go.
RealSense Spinout
Meanwhile, Intel’s moves to streamline the company are starting to cost it some opportunities. RealSense recently announced that it completed its spinout from Intel, landing a $50 million early-stage funding round to allow it to make a greater push into robotics.
And this is another loss for Intel, as RealSense’s operations allow for computers to “sense” the world, using a combination of cameras and similar devices to allow computers to perceive depth, among other things, to better interact with their environment. RealSense’s CEO, Nadav Orbach, told Reuters: “…I have over 3,000 active customers today with a pretty wide ecosystem play and pretty high growth year over year.”
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 26 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 32.01% loss in its share price over the past year, the average INTC price target of $21.44 per share implies 8.2% downside risk.
