Intel Corporation (NASDAQ:INTC) is on a hot streak. INTC stock has already hit fresh 16-year highs. The stock appears set for a massive technical breakout, as shares are on the verge of topping the key $40 technical level. With the market as a whole moving higher as well, signs point toward INTC stock making a major move.
But not everyone is so optimistic for Intel stock. What’s keeping people from getting more hyped up about the Intel story? Stronger than usual in the core PC business is a definite issue. And the company remains perceived as stodgy and isn’t getting much credit from bank analysts at the moment. Let’s take a closer look.
INTC Stock Cons
AMD Is Catching Up: For years, Intel has smothered its competition in its all-important PC chip market. From 2006 through last year, Advanced Micro Devices, Inc. (NASDAQ:AMD) steadily lost ground against Intel. Back then, AMD commanded more than 40% of the market. Last year, this dipped to below 20%.
However, AMD is back with a vengeance. The launch of the new Ryzen chips has put AMD back in its most competitive position in years. Intel’s market share is dipping, and some critics suggest Intel’s latest offerings don’t match up that well with AMD. This has led to a revival in AMD stock, which has gone up hundreds of percent in recent quarters, while INTC stock comparatively lags.
Intel Isn’t Exciting: Intel doesn’t get many investors excited. It’s been a long-term “dead money” stock that has still failed to reclaim its highs from the 2000 tech bubble days. People think of Intel has just a commodity chip producer primarily for PCs, a market that is flat or shrinking slightly.
Even though Intel is doing tremendously great stuff, most people just don’t think of it in the same way they do younger tech firms. Yes, Intel is a serious competitor to NVIDIA Corporation (NASDAQ:NVDA) in self-driving, but for now NVDA stock skyrockets while Intel only slowly ascends. Intel will need to shake off its frumpy image before investors will bid it up to fair value.
Wall Street Is Skeptical: The Street isn’t real excited about INTC stock. In fact, they’re downright sober in analyzing the firm’s prospects. Despite the surging semiconductor sector and huge price targets for competitors, Intel isn’t getting much love.
According to the Nasdaq website, analysts have price targets ranging from $30 to $46, with a consensus of $43. That consensus estimate is just 7% upside, and 46 is hardly ambitious as the single highest estimate on the street. And that $30 price target represents 25% downside off today’s price. Now this could work to the Intel stock price’s favor, as analysts may upgrade the firm later. But for now, institutional money isn’t likely to flood into INTC stock given the subdued analyst opinions.