Intel shares took a beating last Friday, plunging 17% in their worst single-day drop since August 2024. The selloff came after the chipmaker issued a disappointing first-quarter forecast that missed analyst expectations.
Despite the sharp decline, retail investors remain optimistic about Intel’s prospects. A new Stocktwits poll of roughly 1,400 respondents found that 60% believe the drop was overdone and presents a buying opportunity. Only 20% expect the stock to fall further.
Intel reported fourth-quarter results that beat Wall Street estimates on both revenue and profit. However, the company’s first-quarter outlook fell short of expectations. Management guided for Q1 revenue between $11.7 billion and $12.7 billion. Analysts had expected $12.51 billion.
The company also forecasts adjusted earnings per share to break even for the quarter. Wall Street was looking for $0.05 per share.
Intel executives acknowledged that the company failed to accurately forecast demand for AI data center products. The chipmaker couldn’t meet the surge in orders, leaving profitable sales unrealized.
Morgan Stanley raised its price target on Intel to $41 from $38 but maintained an Equal Weight rating. The firm pointed to “meaningful supply constraints” as a major issue. The analyst noted these constraints are especially problematic as Intel works to turn around its foundry business.
Supply issues don’t inspire confidence among Intel’s customers about the company’s ability to serve them consistently in foundry services. This creates additional challenges as Intel competes in the contract chipmaking space.
Other analysts also adjusted their targets after the earnings report. Truist raised its price target to $49 from $39. RBC Capital Markets lowered its target to $48 from $50. Both firms expressed concerns about the weak first-quarter outlook.
The analyst community remains cautious on Intel shares. Out of 47 analysts tracked by Koyfin, 33 recommend holding the stock. Only eight advise buying or rating it higher. Six recommend selling or rating it lower.
The average analyst price target sits at $46.09. That’s just $1 above Intel’s last closing price before the drop.
Intel launched its advanced Core Ultra Series 3 computer processors recently. The company has made progress in its core business areas. But the supply chain issues and missed forecast overshadowed these achievements.
The stock had a strong run before last week’s stumble. Shares gained 84% in 2024 and continued climbing into the new year. Even after Friday’s selloff, Intel stock remains up more than 22% so far in January.
The company’s management admitted to faltering in demand planning for AI data center products during the earnings call. This represents a missed opportunity in one of the fastest-growing segments of the chip market.
The post Intel (INTC) Stock: Morgan Stanley Raises Target Despite Supply Worries appeared first on CoinCentral.
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