Intel
Makes The Turnaround Watch List
I’m always looking, and you should be too. Recently, a few stocks have been added to our lists, primarily because they are entrenched in areas we like. Keep buying shares of MP, USAR, and VG. If you have any questions about these entities, please take the time to read the prior posts. If we change our minds or positions, we’ll let you know.
Intel May Return To Glory
Intel Corporation (“INTC”) closed above $20, marking an increase for the day. Despite this, it has experienced a decline of about 33% over the past year, reflecting ongoing challenges in the semiconductor industry.
In the first quarter of 2025, Intel reported revenue of $12.7 billion, remaining flat year-over-year. The company posted a net loss of $887 million, nearly double the loss from Q1 2024. However, adjusted earnings per share stood at $0.13, easily beating analyst expectations of $0.01.
Segment Performance:
Client Computing Group (CCG): Revenue declined by 8% year-over-year to $7.6 billion.
Data Center and AI (DCAI): Revenue increased by 8% year-over-year to $4.1 billion.
Intel Foundry Services: Revenue rose by 7% year-over-year to $4.7 billion.
For the second quarter of 2025, Intel forecasts revenue between $11.2 billion and $12.4 billion, with an expected EPS of $(0.32) on a GAAP basis and $0.00 on a non-GAAP basis. These projections fall short of Wall Street expectations, contributing to investor concerns.
Under the leadership of new CEO Lip-Bu Tan, Intel is implementing several strategic changes aimed at revitalizing the company:
Organizational Restructuring: Plans to reduce bureaucracy and streamline operations, including expected workforce reductions in Q2.
Return-to-Office Policy: Mandating a four-day in-office workweek starting September 1, 2025, to enhance collaboration and productivity.
Cost Optimization: Targeting $0.5 billion in savings for 2025 and a $2 billion reduction in capital expenditures.
Product Roadmap: Anticipating the release of Panther Lake chips by late 2025, with a strategic shift to 70% in-house manufacturing.
Analyst opinions on Intel are mixed:
Average 12-Month Price Target: $21.29, indicating a modest upside from the current price.
Price Target Range: Estimates vary between $14 and $28, reflecting uncertainty about Intel's turnaround prospects.
Consensus Rating: Hold, based on 2 Buy ratings, 25 Hold ratings, and 4 Sell ratings.
Intel faces significant challenges, including competitive pressures and operational inefficiencies. However, strategic initiatives under new leadership aim to address these issues. Investors should monitor upcoming earnings reports and strategic developments to assess the company's progress in its turnaround efforts.
That’s exactly what I’m going to do. If the price of Intel drops another two to three dollars, I’ll start selling the $15 puts, but for now I’m sitting on my hands.
Good thing you do not have to wait for me to be right. I’m usually early, but face it, Snow White, I’m not. All she waited for was a Prince. I’m just trying to be right and to keep you abreast of what’s happening. I don’t have seven dwarfs. I don’t even have one, but that’s OK, I have more than half a century behind me of learning. It takes time, but in reality, it takes patience.