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Taiwan crisis pushes Intel to invest billions in Europe

Taiwan crisis pushes Intel to invest billions in Europe
Dino Kurbegovic

With the tensions surrounding Taiwan and major forces like China and the US, certain companies stand to benefit on the margins like Intel (NASDAQ: INTC). In essence, the US is looking to bolster domestic chip production with the recently-passed CHIPS and Science Act.

On the other hand, Intel is looking to diversify its chip-building capacity, evidenced by its discussions with Italy to build an advanced semiconductor packaging and assembly plant worth $5 billion, as per an exclusive report by Reuters on August 4.   

Apparently, Italy is one of the targeted countries in Intel’s decade-long plan to invest $88 billion in Europe, with the Italian government possibly covering 40% of the costs. 

Furthermore, Intel is also in discussions with Germany, France, Ireland, Poland, Belgium, and Spain as part of their investment package. 

INTC chart and analysis 

Both the long and short-term trends are negative for INTC, while the stock has been trading between $35.18 and $40.73 in the past month. Per the technical analysis, the resistance zone ranges between $36.97 and $37.11, whilst support is at $34.67.

Furthermore, 85% of all other stocks performed better in the past year than INTC, as year-to-date (YTD), shares are down over 33%.

INTC 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

Meanwhile, TipRanks analysts rate the shares as a hold, seeing the average price in the next 12 months reaching $40.04, 13.17% higher than the current trading price of $35.38.

Wall Street analysts’ price targets for INTC. Source: TipRanks  

Despite some positive developments regarding investments that Intel is making, the last earnings did not meet expectations on Wall Street, leading to notable analysts downgrading the stock. 

Whether the chip maker returns to its former glory will depend highly on the PC market’s demand. With talks of a recession and inflationary pressures, lower expectations could be a normal occurrence in the PC market, which, in turn, is expected to bring more volatility to the stock. 

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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