Intel (NASDAQ:INTC) just got a shot in the arm – and it may owe a big “thank you” to former CEO Pat Gelsinger. The ambitious 18A chip manufacturing process he greenlit, once dubbed a “bet-the-company” gamble, is now gaining real traction. In fact, Microsoft (NASDAQ: MSFT) has reportedly inked a “decisive contract” with Intel, giving its foundry division a major vote of confidence. That news lifted Intel shares 3.4% during Thursday’s trading session.
Some are already calling this Intel Foundry’s “iPhone moment,” and Microsoft isn’t the only one knocking. Google (NASDAQ:GOOGL) and Nvidia (NASDAQ:NVDA) are reportedly circling as well, exploring the use of Intel’s 18A process for their own advanced chips. With its 18A node shaping up to be a compelling U.S.-based alternative to Taiwan Semiconductor’s (NYSE:TSM) cutting-edge N2 technology, Intel’s foundry ambitions are suddenly looking far more realistic.
To meet the expected demand, Intel is going full throttle on production. In addition to the highly publicized Ohio plant, two new fabs are coming online in Arizona, packaging operations are expanding in New Mexico, and a brand-new logic and foundry facility is planned for Oregon. Overseas, Ireland and Israel are also preparing to spin up new lines. And if current interest levels hold, Intel will need every inch of that capacity.
Meanwhile, a Discount on Arrow Lake Chips
While the future may lie in 18A, Intel isn’t forgetting its current offerings. The company is slashing prices on some of its Arrow Lake desktop chips, including the mid-range 265K model. It’s not a top-tier gaming chip, but it’s no slouch either – solid specs, solid performance, and now, a more affordable price tag.
The move could be a strategic one: Intel is likely aiming to claw back some market share with competitively priced chips in a climate where consumers are watching their wallets. After all, a weekend of budget-friendly PC gaming beats the cost of going out, and with the right hardware, it’s just as fun.
Buy, Hold, or Sell? What to Do With Intel Stock Now
Intel’s prospects don’t appear too favorable amongst Wall Street’s analyst corps right now. Based on 26 Holds, 4 Sells and 1 lone Buy, the stock has a Hold (i.e., Neutral) consensus rating. Priced at $21, shares appear almost fully valued, as the current $21.29 average price target indicates. (See INTC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.