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Intel Trails Peers In The AI Race As It Announces Bleak Q1 Financial Performance Forecast

Intel Trails Peers In The AI Race As It Announces Bleak Q1 Financial Performance Forecast
Intel announced a very bleak forecast for its first quarter revenue performance which has pulled down the shares of the company drastically. This, according to experts, is because of the lagging of the chipmaker compared to its peers in the AI race. The performance of the chipmaker is also expected to falter because of weak demand expected from the PC market
Analysts noted that although AI is propelling a boom in the chip industry, Intel appears to be an outlier. Among the largest stock market winners in 2023 were semiconductor manufacturers who provide chips for the large data requirements of generative artificial intelligence.
The remainder of the industry was affected negatively by Intel's prediction, one of the biggest providers of PC chips. It was the Philadelphia SE Semiconductor Index's worst day in over three weeks, down 2.7%.
Rosenblatt Securities analyst Hans Mosesmann stated, "AI seems like (it is) everywhere except at Intel." Rosenblatt Securities has a sell recommendation on the stock.
He continued, saying that the absence of any discernible AI growth vector that shifts any dial "points to another, yes another, transitional year."
Other chipmakers' stock prices dropped by 1.3% to 2.8%, including Advanced Micro Devices, Qualcomm, Micron Technology, and Nvidia.
At the close of business on Friday, Intel's market value decreased by approximately $24.9 billion, to $43.65. In 2023, its stock had increased by 90%.
The chipmaker predicted sales for the upcoming quarter that would be more than $2 billion less than what the market anticipated.
"There's a danger Intel is being left behind as chips from the likes of Nvidia and Advanced Micro Devices play an increasingly important role in the data-hungry AI industry," said Russ Mould, investment director at AJ Bell.
Although Intel isn't yet a major player in the market for AI-specific chips, a third of its server CPUs are now offered in AI systems, and its central processing units (CPUs) are frequently utilised in conjunction with Nvidia's AI chips.
At least fifteen brokerages increased their price targets after certain analysts expressed favourable sentiment towards the company. Based on LSEG statistics, the brokerages' median price is $44.
"The company still stands to win from its AI bet in the long run. Margins appear solid, meaning that CEO Pat Gelsinger's plan will still be put in motion, albeit at a slower pace," said Thomas Monteiro, senior analyst at
LSEG data shows that the stock of Intel is trading at roughly 28 times its 12-month forward earnings projections, compared to 45.08 for AMD and nearly 30 for Nvidia.

Christopher J. Mitchell

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