So while the recent kerfuffle over chip stock Intel’s (INTC) CEO Lip-Bu Tan appears to have died out as President Trump suddenly approves of the man with an “amazing story,” a newer and potentially larger problem emerged. When the Wall Street Journal is asking questions like “What are you?,” then you know something is truly amiss. But Intel investors were still apparently feeling the love from yesterday, as shares notched up nearly 1.5% in Wednesday afternoon’s trading.
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“Forget the White House sideshow. Intel must decide what it wants to be.” That was how the Wall Street Journal report kicked things off. It pointed out that Intel’s future had already been “…dangling by a thread,” and that was even before the latest controversy kicked up. Intel has spent years as a chip designer, of course. But more recently, Intel has fired up aspirations of making its own chips in more cases as well. Those aspirations have cost Intel dearly, and with Lip-Bu Tan now squarely in the driver’s seat, questions about just what Intel should be are coming back to bite.
We may well hear something about the chip-making side of things sometime next week or so, when Tan concludes a set of meetings with President Trump’s cabinet. But with Intel increasingly losing ground to its competitors, the end result is a vital need to pick a lane and follow through. Bernstein analyst Stacy Rasgon—who has a five-star rating on TipRanks—pointed out that “…Lip-Bu made a good impression,” if nothing else. That suggests a potential win ahead for Intel if some positive benefits come out of the cabinet meetings.
Futureproofing
Meanwhile, new reports suggest that Intel may be looking for a way to stay relevant in the long-term, and one way is through its next central processing unit (CPU) socket. The reports suggest that the new socket will be sufficient to serve the next four generations of processors.
The socket, dubbed LGA1954, will support not only Nova Lake, but also Razer Lake, Titan Lake and Hammer Lake as well. This means the socket will be sufficient for several lines, and those who want to upgrade their computers in the future will be more readily able to do so. Some are already wondering if this is an attempt to lure back the do-it-yourself and home-brew crowds, markets that Intel has been losing to some of its competitors in the past.
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 three Sells assigned in the past three months, as indicated by the graphic below. After a 9.49% rally in its share price over the past year, the average INTC price target of $22.12 per share implies 0.07% downside risk.
