Intel (NASDAQ: INTC) hit a five-year low on Monday, August 22, with the semiconductor industry and the broader market sell-off concerned about a more aggressive Federal Reserve (Fed).
During the last trading session, INTC sank by 4.35% to trade at $33.84, a price not seen since 2016. Baird analyst Tristan Gerra also recently downgraded INTC shares after the firm released its Q2 earnings, showing signs of weakness.
“Intel’s further push out of Sapphire Rapids, which is rapidly becoming a stale product before even launching, likely significantly accelerates server customer migration to AMD in 2023 in our view, and we expect meaningful market share gains as a result.”
With lowered notebook shipments and a troubling macro environment, the analyst sees the drop in the share price persisting throughout 2023.
INTC chart and analysis
Both the long and short-term trends are negative for Intel; when comparing the yearly performance of all stocks, INTC is a bad performer in the overall market, with 84% of all stocks performing better. In the last month, INTC has been trading from $33.73 to $40.42 continuing a downtrend.
Moreover, technical analysis shows the latest resistance zone from $35.49 to $35.53 and a current support line at $33.74.
Despite the downtrend, the consensus rating among TipRanks analysts is split as the shares are rated as a hold, seeing the average price in the next 12 months reaching $40.04, 18.32% higher than the current trading price of $33.84.
With markets trying to get to grips with what the Fed will do and how that will reflect on the chip stocks and risk-on assets in general, INTC keeps underperforming the market.
Meanwhile, Intel’s CEO, Pat Gelsinger, spoke on August 22 at the Hot Chips 2022 conference, highlighting various innovations the firm will be introducing and focusing on the Meteor Lake processors.
In addition, with signs of weaker PC demand and the fact that Intel’s main competitor, Advanced Micro Devices(NASDAQ: AMD) is in a much better position, it is hard to recommend to market participants to buy INTC.
At the moment, it seems that the best play surrounding Intel’s stock is to keep it on your watchlist as a possible speculative recovery play, which will depend on numerous factors going in its favor.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.