Sticking With This Intel Price Target as Trump, Apple Update Prove Us Right
As the president sends shares on the move, we’re revisiting our target price for the foundry name.
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I recently covered Intel (INTC) here at TheStreet Pro. It was just about a week and a half ago.
That same week, I was featured in a segment about Intel on Fox Business with Charles Payne. Hence, I kind of became the Intel guy, at least for the moment. The story at that time were rumors that both Nvidia (NVDA) and Alphabet (GOOGL) were considering using Intel as a back-up to Taiwan Semiconductor (TSM) to meet their respective foundry needs. The news broke that Alphabet had actually already inked a deal to do just that. Finally, former CEO Pat Gelsinger’s foundry business, under the leadership of current CEO Lip-Bu Tan, is starting to produce results.
On Thursday morning, Intel shares were on the move again. President Trump posted to social media, “Stupid Presidents took our Economy for granted, and let Taiwan and others steal our Semiconductor Factories. Apple has agreed to work with Intel to design and build its Chips in America.”
To clarify the moment, the president added, “When I won my Second Term (Third, actually!), it was clear America needed its Semiconductor Industry to come back to the U.S.A. We design everything, but we need to BUILD it here, NOW! So I decided to help Intel because we need to design and build our Chips right here in America.”
Just this week, Intel had announced that the firm’s next generation 18A manufacturing process had entered initial production, as demand continues to accelerate for its central processing units in support of the broader business.
Wedbush Comments
Dan Ives’ team at Wedbush released some comments on Thursday morning. Ives is a five-star (out of five) analyst. Over the past two years, he has compiled a 54% success rate to go with an average return of 24.8%. As far as I can tell, he does not cover Intel, but he does have an “outperform” rating on AAPL with a target price of $400.
The Ives team wrote, “This (news) follows reports from Bloomberg that Apple was considering Intel and Samsung’s US foundries to produce certain main processors powering its devices, but this partnership helps Apple with chip development and manufacturing on US soil with greater focus on reducing dependence on Asian manufacturing facilities.”
The note concludes, “This is the right time to do this deal with Apple looking to diversify its manufacturing footprint with demand for advanced chips higher driven by AI chip developers and reducing reliance on TSMC, Apple’s major overseas provider.”
Going Back to the Chart
Readers will see that INTC is trying to break out past the $129 bull-flag inspired pivot that I gave you a week and a half ago.
Relative strength continues to rise without hitting technical overbought territory. The daily MACD is now postured bullishly, which was not the case last week. The histogram of the nine-day EMA is now in positive territory. In addition, the 12-day EMA has now crossed above the 26-day EMA. These are both bullish signals.
Target Price: $155 (reiteration)
Pivot: $129
Add: Down to 50-day SMA (currently $101)
Panic: Loss of 50-day SMA
At the time of publication, Guilfoyle was long INTC, NVDA and TSM equity.
