Intel (NASDAQ:INTC) was a darling of the chipmaking market many years ago. Then, it was a laughingstock in 2022, and then a darling again in 2023. Now, Intel is a troubled business again in 2024. Honestly, who really needs to invest in a nauseating roller-coaster play like Intel stock?
We’re giving the stock a “D” grade and telling you right now that it’s perfectly fine to get off that roller coaster. Just look at the progress of the Intel share price from May 2023 to May 2024.
That’s right — there was no progress during that time frame. Intel stock was “dead money,” and we didn’t identify any compelling reasons to invest your hard-earned capital in Intel now.
U.S. Blocks Intel’s Chip Sales to Huawei
As multiple reporters have stated, the U.S. government has banned Intel from exporting to China-based technology-product manufacturer Huawei Technologies. The objective is for the U.S. to curb China’s tech-industry power.
That’s bad news for Intel, a major supplier of chips to Huawei. Intel has acknowledged that Huawei export ban would put pressure on the chipmaker’s revenue.
This is the worst possible timing for Intel. The company is trying to reinvent itself as a foundry chipmaker. By that, we mean Intel seeks to manufacture its own chips and sell them to other companies.
Considering this adverse development, Daniel Newman, CEO of The Futurum Group, offered a stark warning about Intel stock.
“There’s no reason to own it in the short-term, since short-term investors have to deal with capex outlays, issues with the foundry business, and a lack of meaningful data-center growth,” Newman cautioned.
Apple Will Be a Tough Competitor to Intel
In case there wasn’t enough negative news about Intel, here’s another distressing tidbit. As you may be aware, artificial intelligence personal computer chips are an important revenue source for Intel. Now, Intel will have a major competitor in this area.
Actually, “competitor” might not be the right word; “obliterator” may be more appropriate. Apple’s (NASDAQ:AAPL) new M4 chip is supposedly so powerful that it could make the competitors’ AI-PC chips instantly obsolete.
Per Yahoo! Finance, Apple claims that the M4 chip’s neural engine is the “company’s fastest yet.” The M4 is apparently “more powerful than any neural processing unit available on today’s AI PCs.”
Consider the implications for Intel in 2024. Apple is a massive, capital-rich juggernaut that can continue to develop its chips. Intel now has to fend off the threat posed by Apple’s ultrapowerful M4 chip. To borrow some old song lyrics, we “see a bad moon rising” for Intel.
Intel Stock: Say ‘No, Thanks’ to the Roller Coaster
Intel’s shareholders were either brilliant or just luck in 2023. Hopefully, they had the foresight to take profits while those profits were available.
Today, we’ve just given you some compelling reasons to either be neutral or bearish on Intel in 2024. All in all, we’ll continue to monitor the company for further developments, but we’re assigning Intel stock a “D” grade and aren’t currently recommending it.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.