April proved to be a turbulent month for Intel as its shares closed with a staggering decline of more than 30%, marking its worst performance in over 20 years. The chipmaker continues to grapple with challenges in executing a turnaround strategy amidst a rapidly evolving market landscape.
At mid-session on Tuesday, Intel’s stock was down 1.7%, setting it on track for its most substantial monthly drop since June 2002. Year-to-date, the stock has plummeted by 38%, emerging as the weakest performer in the Philadelphia Stock Exchange Semiconductor Index. While the semiconductor index experienced a modest decline of 3.6% in April, it remains up by 13% for the year 2024.
The significant selloff in Intel shares followed disappointing financial results last week, coupled with a bleak forecast that hinted at prolonged challenges ahead for the company’s turnaround efforts. Earlier in the month, Intel’s factory operations also received a lacklustre outlook, further dampening investor sentiment.
Analysts at Stifel expressed cautious optimism, noting that 2024 could mark a bottom for many aspects of Intel’s business. However, they highlighted uncertainties regarding the pace of recovery, indicating that the climb back up could be gradual and arduous.
Despite the current setbacks, Intel’s prospects are anticipated to improve in the coming years. Revenue is projected to rebound by 4.2% in 2024 after experiencing a 14% decline the previous year. Moreover, growth is expected to accelerate to over 12% in the following year, representing the company’s most rapid pace of expansion since 2018.
However, Intel’s stock remains one of the least favoured in the chip industry, with fewer than a quarter of analysts recommending a buy. Its consensus rating, reflecting the ratio of buy, hold, and sell recommendations, stands at 3.33 out of five, underscoring the prevailing scepticism among investors. Only Texas Instruments garners a lower consensus rating, at 3.27, signalling ongoing challenges for Intel to regain market confidence and investor trust.
