The Zacks Analyst Blog Highlights Intel, NVIDIA and Advanced Micro Devices

For Immediate ReleaseChicago, IL – December 6, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Intel Corporation INTC, NVIDIA Corp. NVDA and Advanced Micro Devices, Inc. AMD.Here are highlights from Thursday’s Analyst Blog:Can Intel Revive Its Mojo with Shakeup at the Top?Intel Corporation recently announced the immediate retirement of CEO Pat Gelsinger, with David Zinsner and Michelle Johnston Holthaus being named as the interim Co-CEOs of the company. The corporate restructuring of the top management was aimed at reviving the lost glory as Intel fell down the pecking order to relinquish its coveted position on the Dow Jones Industrial Average (“DJIA”) to NVIDIA Corp.The radical shakeup in the leading stock market index marked a significant shift in the semiconductor ecosystem with the growing dominance of AI (artificial intelligence) and ended Intel's 25-year run in DJIA. Before the board could zero in on the new CEO to steer the ship, the top management offered a sneak peek at the broader goals of the company to soothe investor sentiments.INTC’s Core Strategy Remains UnchangedDispelling concerns regarding any knee-jerk reactions, management vouched that the core strategy of the company would remain unchanged and reiterated its earlier revenue guidance of $13.3-$14.3 billion for the fourth quarter of 2024. The company aimed to emphasize the diligent execution of operational goals to establish itself as a leading foundry.However, management observed that the company needs to witness a significant cultural change to transition from Integrated Device Manufacturing to being a world-class foundry. This would involve a shift from a “no wafer left behind” mindset, where the company built extra capacity to meet demand (hoping that the added capacity would not be idle at any time) to “no capital left behind” mindset that aims to drive efficiency by eking out every wafer possible from the existing capacity.INTC Betting Big on AI ChipsIntel has launched AI chips for data centers and PCs. This marks one of the largest architectural shifts for the company in 40 years. The strategic decision is aimed at gaining a firmer footing in the expansive AI sector, spanning cloud and enterprise servers to networks, volume clients and ubiquitous edge environments, in tune with the evolving market dynamics.The company has unveiled the Intel Core Ultra, which features a neural processing unit that enables power-efficient AI acceleration with 2.5x better power efficiency than the previous generation. With superior GPU and CPU capabilities, it can speed up AI solutions. The company also launched the new vPro platform with Intel Core Ultra processor that delivers enhanced power efficiency. With dedicated AI acceleration capability spread across the central processing unit, graphics processing unit and the new neural processing unit, it will unlock an endless new wave of AI experiences across all apps.Intel Lagging on Innovation?Although Intel has scaled its AI footprint, it lagged NVIDIA on the innovation front, with the latter’s H100 and Blackwell graphics processing units (GPUs) being runaway successes. Leading technology companies are reportedly piling up NVIDIA’s GPUs to build clusters of computers for their AI work, leading to exponential revenue growth.An accelerated ramp-up of AI PCs further affected the short-term margins of Intel as it shifted production to its high-volume facility in Ireland, where wafer costs are typically higher. Margins were also adversely impacted by higher charges related to non-core businesses, charges associated with unused capacity and an unfavorable product mix.Intel has been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers and affect operating and financial results.INTC Stock Price PerformanceThe stock has plunged 46.8% in the past year against the industry’s growth of 152.8%, lagging its peers Advanced Micro Devices, Inc. and NVIDIA. Much of this underperformance is due to severe financial difficulties and operational challenges, which have forced management to undertake a comprehensive review of its businesses.Intel is mulling various options, including the potential split of its product design and manufacturing divisions and evaluating which factory projects should be terminated. It also plans to establish Intel Foundry as an independent subsidiary to unlock strategic benefits and improve capital efficiency with clearer separation and independence from the rest of Intel. The division incurred an operating loss of $5.8 billion in the last reported quarter.Earnings Estimate Revision Trend of INTCEarnings estimates for Intel for 2024 have plunged 104.8% over the past year to 9 cents, while the same for 2025 has declined 60.7% to 94 cents. The negative estimate revision depicts bearish sentiments for the stock.End NoteIntel's innovative AI solutions hold immense promise for the broader semiconductor ecosystem. By addressing the challenges of scalability, performance and interoperability, it is paving the way for widespread AI adoption across enterprises worldwide. Management is focusing on simplifying parts of its portfolio to unlock efficiencies and create value. It has aimed to allay investor concerns by reiterating its short-term guidance while maintaining core focus.However, the recent product launches appear “too little too late” for Intel. In addition, margin woes amid strict export restrictions, unfavorable product mix and elevated customer inventory levels weigh on its bottom line. With declining earnings estimates and abysmal price performance compared with its peers, the stock is witnessing a negative investor perception. With a Zacks Rank #3 (Hold), Intel appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks