4. Intel Corporation (NASDAQ:INTC)
Investors on Reddit that consider the stock undervalued: 12
Intel Corporation (NASDAQ:INTC) is an American multinational technology which manufactures computer components and related products and is one of the largest sellers of semiconductor chips in the world. Most computer manufacturers get their microprocessors from Intel. It is one of the best undervalued stocks to buy according to Reddit and trades at a paltry value. This is seconded by experts at NASDAQ, who believe the stock has a low valuation because of investors underestimating the boost the company will enjoy from its manufacturing and AI chips business during 2024-2025.
During the first quarter of 2024, the company beat analyst estimates, posting an EPS of $0.18 per share against forecasts of $0.13, driven by a strong selling of previously held inventory and operating spending discipline. CEO Patrick Gelsinger says they see the quarter as the ‘bottom’, and expect a sequence of growth over the coming quarters this year, and even in 2025. They have two main reasons for their positive outlook for the company. The first is the beginning of an enterprise refresh cycle and the second is the growing momentum for AI PCs.
The bear case against the company is the ongoing instability issues users are facing with the Intel Core i9 that is causing games to crash. This has forced several game service operators to switch to AMD. Another factor that can affect the stock’s performance is media reports about Intel considering discontinuing its plan to build a $25 billion factory in Israel. The company has neither confirmed nor denied the rumors. Another strong bearish sentiment regarding the stock is that it has not adequately upgraded its chipmaking plants over the years, because of which it conceded space to Taiwan Semiconductor Manufacturing (TSM) and AMD. The TSM has joined the race to manufacture more power-efficient and denser chips, while AMD grabbed a sizable chunk of the x86 CPU market, growing its share from 19.4% to 35.6% between 2016 and 2022, with Intel’s shrinking from 80.6% to 64.1%.
Having said that, most industry analysts are bullish about the company’s future. There is consensus among them on the stock’s Hold rating, with an average target share price of $40.09, representing an upside of 21.56%. Moreover, according to Insider Monkey, as many as 77 hedge funds were optimistic about the stock as of the first quarter of 2024.
Parnassus Value Equity Fund anticipates future growth at Intel Corporation (NASDAQ:INTC)’s and shared the following remarks about the company in its first quarter 2024 investor letter:
Intel Corporation (NASDAQ:INTC), one of the world’s largest semiconductor chipmakers, reported strong results for the fourth quarter, but its sales outlook for the first quarter fell short of expectations. While demand for the company’s central processing units may be temporarily weak, we believe the market for Intel’s personal computer and data center chips will continue to grow.
