Chip stocks fall with Nvidia after data center rev disappointment
Investing.com - TD Cowen has reiterated its Hold rating and $20.00 price target on Intel (NASDAQ:INTC), which currently trades at $25.27, following the chipmaker’s announcement of a U.S. government investment. According to InvestingPro analysis, Intel appears slightly overvalued at current levels.
The U.S. government is taking approximately a 9.9% stake in Intel, according to the firm’s analysis. With a market capitalization of $109.82 billion and annual revenue of $53.07 billion, Intel remains a significant player in the semiconductor industry. TD Cowen views the finalized agreement with the Trump administration on previously signed CHIPS Act and Secure Enclave funding as positive, along with Intel’s apparently favorable political position.
Despite these developments, TD Cowen notes that Intel does not appear to be receiving meaningful net new capital. The firm emphasizes that Intel’s core challenges are technical and competitive in nature—issues that funding alone cannot resolve.
The research firm expressed difficulty gaining confidence in Intel’s immediate and long-term path forward, stating that roadmaps and customer confidence cannot be rebuilt overnight. TD Cowen also observed that Intel’s strategy seems to be in flux.
TD Cowen acknowledged that Intel’s market breadth, extensive intellectual property assets across compute, and newly aligned incentives with the White House should not be discounted, suggesting potential ways to monetize assets for shareholders. InvestingPro data reveals that while Intel isn’t currently profitable, analysts expect the company to return to profitability this year. Subscribers can access 12 additional key insights about Intel’s financial health and market position.
In other recent news, Intel Corporation is at the center of several significant developments. The U.S. government announced plans to invest $8.9 billion in Intel, acquiring a 9.9 percent stake through the purchase of 433.3 million primary shares at $20.47 each. This investment is funded by $5.7 billion from previously awarded but unpaid CHIPS Act grants and $3.2 billion from the Secure Enclave program. In a related development, President Trump highlighted the value of this deal, claiming it brings substantial benefits to the U.S. at no cost. Meanwhile, Intel is also in talks with large investors for additional equity infusions at a discounted rate, following a $2 billion capital injection from SoftBank. Truist Securities has reiterated its Hold rating on Intel stock, maintaining a price target of $21, while noting that Intel’s challenges go beyond financial issues. Furthermore, U.S. Commerce Secretary Lutnick indicated that the government aims to convert its funding into an equity stake, emphasizing the importance of domestic semiconductor manufacturing. These developments reflect Intel’s strategic maneuvers amid ongoing industry challenges.
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