Intel (NASDAQ: INTC) is taking a big risk with its chip fabrication business, Intel Foundry. The company is betting a lot of time and money on this venture, with hopes of reaping the rewards in the future. However, with Intel Foundry still in its early stages, the stock is currently rated a “D” grade.
Intel is aiming to differentiate itself from other U.S. companies by not just designing chips, but also fabricating them in-house from start to finish. This ambitious goal is a make-or-break moment for Intel, as the company looks to regain its former glory in the tech-hardware industry.
What’s at Stake for Intel?
Intel is in desperate need of a turnaround after losing market share to competitors in recent years. The success of Intel Foundry is crucial for the company’s future growth. Intel anticipates shipping chips for over 100 million AI-enabled PCs by 2025 and generating $1 billion in software revenue by 2027, a significant increase from its 2021 revenue of $100 million.
Despite these optimistic projections, Intel recently faced challenges with a dividend suspension, workforce reduction, and lower-than-expected earnings in the second quarter of 2024.
The Reality Check for Intel
Both in the Foundry business and overall, Intel has a lot to prove. Analysts are cautious about jumping into Intel stock prematurely, as the company’s progress may be slow and disappointing. Until Intel’s Foundry business shows promising results, it may be best for investors to wait on the sidelines.
Should You Invest in Intel Stock?
As Intel’s Foundry business is still in its early stages, it may take time for the company to see profits. For now, Intel stock is not a top pick for investors and is rated a “D” grade. It’s important to monitor Intel’s progress in the Foundry business before making any investment decisions.
Remember, investing in stocks involves risks, and it’s essential to conduct thorough research before making any financial decisions.
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