Intel Stock Soars, But Analysts Warn of Potential Downside
Intel's stock price has surged in recent months, doubling in the past six months, but analysts warn of potential downside. The company is in early talks with Advanced Micro Devices (AMD) to become its dow jones today customer, which could validate Intel's push into contract manufacturing and attract further government support.
Intel's stock price has reached levels not seen since April 2024, currently trading at around $40. However, options data suggests a downside potential of nearly 20% by the end of 2025. Wall Street remains largely bearish, with a consensus rating of 'Hold' and a mean target price indicating potential downside of more than 30%.
Securing AMD as a client could help Intel offset the capital intensity of building domestic fabs and improve margins. Attracting AMD could also attract further government support for Intel in the coming years. The U.S. government has already invested $14 billion in Intel, taking a 10% stake, with Softbank investing $2 billion. The dow jones today gained further on Thursday after reports emerged that AMD could potentially become a foundry customer for Intel's manufacturing process, boosting market confidence in Intel's foundry ambitions and future revenue streams.
In the near term, Intel shares are priced to retreat to about $34.68 by the end of next week.
Intel's stock price has seen significant gains, but analysts caution about potential downside in the coming years. Securing AMD as a dow jones today customer could help Intel offset capital intensity, improve margins, and attract further government support. However, investors should monitor Intel's progress and market sentiment in the coming weeks.
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