Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 23 Apr, 25 | INTC | Buy | USD 19.51 | USD 20.9 | USD 22.5 | 1 day | Closed |
10.15%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Intel Corporation designs, develops, manufactures, markets, and sells computing and related products and services worldwide. It operates through Client Computing Group, Data Center and AI, Network and Edge, Mobileye, and Intel Foundry Services segments. The company's products portfolio comprises central processing units and chipsets, system-on-chips (SoCs), and multichip packages; mobile and desktop processors; hardware products comprising graphics processing units (GPUs), domain-specific accelerators, and field programmable gate arrays (FPGAs); and memory and storage, connectivity and networking, and other semiconductor products. It also offers silicon devices and software products; and optimization solutions for workloads, such as AI, cryptography, security, storage, networking, and leverages various features supporting diverse compute environments. In addition, the company develops and deploys advanced driver assistance systems (ADAS), and autonomous driving technologies and solutions; and provides advanced process technologies backed by an ecosystem of IP, EDA, and design services, as well as systems of chips, including advanced packaging technologies, software and accelerate bring-up, and integration of chips and driving standards. Further, it delivers and deploys intelligent edge platforms that allow developers to achieve agility and drive automation using AI for efficient operations with data integrity, as well as provides hardware and software platforms, tools, and ecosystem partnerships for digital transformation from the cloud to edge. The company serves original equipment manufacturers, original design manufacturers, cloud service providers, and other manufacturers and service providers. It has a strategic agreement with Synopsys, Inc. to develop EDA and IP solutions; and ARM that enables chip designers to build optimized compute SoCs on the Intel 18A process. Intel Corporation was incorporated in 1968 and is headquartered in Santa Clara, California.
Client Segment Growth: The Client Computing Group achieved 4% YoY growth in full-year revenue, reaching $30.3 billion
Strong Cash Flow: Intel generated $8.3 billion in operating cash for full-year 2024, showcasing strong liquidity
Gross Margin Compression: Full-year GAAP gross margin fell by 7.3 percentage points YoY, from 40.0% to 32.7%
Significant Net Loss: Intel posted a GAAP net loss of $18.8 billion for 2024, a dramatic reversal from $1.7 billion in net income the prior year
Intel faces elevated execution risk due to structural transitions within its business model and intensifying competitive dynamics in core segments like AI and data centers
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 19.51 | 18.0 | 20.9 | 22.5 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Revenue and Profitability Overview
Intel Corporation reported a 7% year-over-year (YoY) decline in revenue for the fourth quarter of 2024, totaling $14.3 billion, compared to $15.4 billion in Q4 2023. For the full year, revenue dropped 2% YoY to $53.1 billion. GAAP earnings per share (EPS) for Q4 stood at a loss of $0.03, with a non-GAAP EPS of $0.13. For the full year, Intel recorded a GAAP loss per share of $4.38 and a non-GAAP loss of $0.13, reflecting a significant downturn in profitability.
Margins and Operational Efficiency
The company's gross margin contracted notably in both Q4 and full-year 2024. On a GAAP basis, gross margin dropped from 45.7% to 39.2% YoY in Q4, while full-year margins fell from 40.0% to 32.7%. Non-GAAP margins followed a similar pattern. Operating margin for the quarter declined by 13.9 percentage points to 2.9% (GAAP), and for the full year, Intel posted a GAAP operating loss margin of 22.0%, down from a marginal profit the previous year. These declines were partially offset by a 9% YoY reduction in R&D and MG&A expenses for the quarter.
Segment Performance
Intel's business unit revenues reflected mixed performance. The Client Computing Group (CCG) posted $8.0 billion in Q4 revenue, down 9% YoY, but grew 4% for the full year to $30.3 billion. Data Center and AI (DCAI) revenues decreased 3% in Q4 but edged up 1% annually to $12.8 billion. Network and Edge (NEX) saw a 10% rise in Q4 and a 1% annual increase to $5.8 billion. The Intel Foundry segment, however, experienced a 13% drop in Q4 revenue and a 7% decline for the year, totaling $17.5 billion.
Cash Flow and Capital Allocation
Despite earnings challenges, Intel generated $3.2 billion in operating cash flow in Q4 and $8.3 billion for the full year. The company maintained shareholder returns by distributing $1.6 billion in dividends in 2024. These figures demonstrate Intel’s continued ability to generate cash, even amidst profitability headwinds, and underscore its ongoing commitment to shareholder returns.
Strategic Initiatives and Technological Advancements
Intel highlighted several strategic milestones in Q4. The internal foundry model implemented in early 2024 aims to increase transparency, accountability, and operational efficiency. Intel also made progress in AI and semiconductor technologies, including launching new AI-capable processors and demonstrating cutting-edge memory and packaging technologies. Additionally, Intel signed a definitive agreement with the U.S. Department of Commerce for up to $7.86 billion in funding under the CHIPS Act, receiving $2.2 billion in initial disbursements by early 2025.
Business Outlook for Q1 2025
For the first quarter of 2025, Intel projects revenue between $11.7 billion and $12.7 billion. The company anticipates a GAAP EPS loss of $0.27 and a break-even non-GAAP EPS. Gross margins are forecast at 33.8% GAAP and 36.0% non-GAAP. Intel attributes the outlook to seasonal weakness, macroeconomic uncertainties, inventory digestion, and competitive pressures, emphasizing the need for focused execution to maintain momentum
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Intel Corporation (NASDAQ: INTC) at the closing market price of USD 19.51, as on April 22, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Semiconductors
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| INTC Intel Corporation |
0.61 2.79% | 22.49 | 32.02 | 26.74 | 2.80 | 1.44 | 3.25 | 15.67 |
| NVDA NVIDIA Corporation |
2.09 1.33% | 159.34 | 62.11 | 36.76 | 36.43 | 51.65 | 36.19 | 61.96 |
| AVGO Broadcom Inc |
5.28 1.96% | 275.18 | 139.68 | 28.99 | 17.14 | 12.73 | 19.13 | 40.92 |
| TSM Taiwan Semiconductor Manufacturing |
1.20 0.51% | 234.80 | 19.45 | 15.92 | 0.24 | 4.85 | 0.22 | 0.30 |
| AMD Advanced Micro Devices Inc |
-0.61 0.44% | 137.91 | 244.65 | 48.78 | 11.64 | 4.72 | 11.51 | 62.93 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 22,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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