Intel's Inventory Issues: Redditors Highlight How Overstock 'Killed Their Margins,' Yet Analysts See Upside

Benzinga - by Surbhi Jain, .

In the ever-evolving landscape of technology and semiconductor manufacturing, one company that often finds itself at the forefront of discussion is Intel Corp (NASDAQ:INTC). The company is set to report Q1 earnings in three days on Thursday, after market close.

A recent Reddit post on the r/stocks subreddit sparked a flurry of opinions on whether Intel is currently undervalued, prompting investors and enthusiasts to weigh in on the company’s future prospects.

Is Intel undervalued?

byu/KimuraKan instocks

User KimuraKan initiated the conversation by pointing out Intel’s consolidation since its rise in October 2023. They pondered whether the current price range, particularly within the $35-$37 zone, presents a buying opportunity.

Also Read: Intel Builds World’s Largest Neuromorphic System, Code-named Hala Point, To Enable More Sustainable AI

Concerns Over Competing With TSMC

Additionally, the potential relocation of TSMC’s operations from Taiwan due to geopolitical tensions adds another layer of uncertainty for Intel’s future.

Margin Concerns

Contrarily, user JRshoe1997 expressed a rather pessimistic view of Intel’s product competitiveness, citing a decline in its data center division compared to its competitors. They also noted that Intel “built up so much inventory on these products that they had to sell them at extremely low costs which killed their margin of profitability.”

This perspective underscores the challenges Intel faces in maintaining its market share and technological edge in crucial sectors like data centers.

Comment

byu/KimuraKan from discussion

instocks

Competition Concerns

However, Pinotwinelover offered a more balanced outlook, acknowledging Intel’s setbacks while emphasizing its importance in the semiconductor ecosystem. Despite lagging behind technologically, Intel’s foundry business and the expertise of its workforce remain valuable assets, especially from a national security standpoint.

Complex Future Or Turnaround Potential?

Wall Street analysts currently have a consensus Neutral rating on the stock, with a consensus price target of $38.72.

Three recent analyst ratings for Intel were provided by Wedbush, Susquehanna, and Evercore ISI Group, all released in mid-April 2024. Their collective average price target of $40 suggests a potential upside of 17% for the company’s stock.

INTC Price Action: Shares of Intel were down 2.4% to $34.20 on Friday.

Read Next: AMD and Intel Lead the AI Revolution in Data Centers, Highlighting Advanced GPU Breakthroughs

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