Intel Stock Drops 36% in 2024
- Intel's 2024 stock prices drop by 36%
- Intel's 2Q24 revenue and non-GAAP EPS guidance lower than expected
- Intel's roadmap and technology leadership identified as areas of concern
Intel Corporation has experienced a significant drop in stock prices of approximately 36% over the course of 2024. The company's revenue and margin outlooks for the current quarter have not met expectations, leading to concerns about Intel's short-term and medium-term outlook. Some analysts predict a multi-year reconstruction in areas of historical expertise and AI.
Intel's earnings forecast has received mixed reviews from analysts. Concerns have been raised about the company's ability to achieve gross-margin expansion next year and the impact of the artificial-intelligence boom on its central processing units. While some predict a pickup in the second half of the year, others have downgraded the stock and lowered their target prices.
In the first quarter of 2024, Intel reported weak quarterly earnings of 18 cents per share. However, sales of $12.72 billion missed estimates by 0.44%. Despite these results, CEO Pat Gelsinger remains confident in the company’s future. Analysts have varying ratings on Intel stock, with some reducing price targets and others maintaining their ratings.
Intel's 2Q24 revenue and non-GAAP EPS guidance were lower than expected. This was attributed to the delayed recovery in traditional server demand now expected in the second half of the year. This delay is due to Cloud and Enterprise customers prioritizing AI infrastructure spending. Despite these challenges, Intel is making progress in Accelerating Computing, particularly with the launch of Gaudi3.
Intel's roadmap and technology leadership have been identified as areas of concern. The company's guidance for >$500M in Habana sales in 2H’24 was below expectations. However, new products like Sierra Forest and Granite Rapids are on track for release. Intel anticipates a strong second half driven by cyclical improvements, AI PC growth, and positive enterprise trends. The company is focusing on the Gaudi3 ramp, CHIPS grants, and cost reductions to improve profitability. However, supply constraints are hindering Intel’s ability to meet the increased demand for Meteor Lake.
Despite the challenges, some analysts believe that new product ramps and stable server share, combined with low expectations, could limit downside as Intel trades at a lower P/S multiple compared to Advanced Micro Devices Inc and Nvidia.