New Intel Price Target, Highest on Wall Street, After High-Powered Chip Update
The beleaguered chip manufacturer is preparing for a global rollout of a new product that has bolstered the stock.
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Sarge, aren't you the one that just wrote a positive piece on Taiwan Semiconductor (TSM) that was so positive, at least in part, because Reuters had reported that both Nvidia (NVDA) and Broadcom (AVGO) had been testing Intel's (INTC) 18A chip technology and at least Nvidia had chosen not to move forward as a client using that production process?
Reuters had indeed reported that initial tests had led to customer satisfaction. Ouch!
That's true. But, in that piece, I also said that the reason not to give up completely on Intel was that high-end AI-capable chip designers like Nvidia need more chips than Taiwan Semiconductor can possibly supply and they need them as quickly as production can be increased. I noted that Nvidia had gone ahead and completed its planned purchase of $5 billion worth of Intel equity
At the time, I wrote, "Even if Intel's foundry is not up to the level of excellence required, if Nvidia is not giving up, one can almost count on Intel catching up and doing it quickly."
I informed readers that I was long both TSM and INTC and I planned to stay long both of those names.
On Wednesday
Intel ran 6.5% to close at $42.63. There's been some mild profit taking on Thursday morning in the wake of that run. Readers may recall that I was on my way out of Intel not too long ago. Thank goodness I hung on to the last 40% (in terms of share count) of that position.
So, what happened?
On Wednesday, Intel revealed that the firm has successfully shipped its first products that had gone through the 18A manufacturing (foundry) process. Specifically, the chips are of the Intel Panther Lake line, Core Ultra Series 3 and will be the brains behind more than 200 PC designs.
Pre-orders for the Core Ultra 3 chips began on January 6. The global rollout will start on January 27. Additional designs will be released over the next six months. It is being said that these chips make a strong case for localized computing.
Wall Street
In response, analyst Ben Reitzes of Melius Research, who is rated at four stars out of five by TipRanks, upgraded Intel from a "Hold" rating to a "Buy." Reitzes also increased his target price from $33 all the way to $50. That makes Reitzes the second highest target price for this stock on Wall Street. Ivan Feinseth of Tigress Financial, who is rated at five stars by TipRanks and is one of my most closely followed analysts, has a target of $52. Intel reports in two weeks.
The Charts
Word of caution: Should Wednesday's high for INTC remain the high for very long, the stock may have just put itself into a double-top pattern of bearish reversal. The downside pivot would be $35, but the stock does currently have the support of both the swing crowd and professional managers by virtue of the 21-day EMA and 50-day SMA, respectively.
Both the RSI and daily MACD are in good shape as well. Could there be something else going on?
The stock may also form, and this is what I think I see, an ascending triangle of bullish continuation. This pattern bears a $44 upside pivot. Based on that pivot, I will now place a $55 target on these shares. Hence, I now have the high target price for INTC on Wall Street. Rah.
At the time of publication, Guilfoyle was long TSM, INTC, NVDA and AVGO equity.
