INTC Stock Prediction: Exploit The Undervaluation Of Intel’s Stock

motek 1This INTC stock prediction article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.


  • Relative to its rivals, Intel’s stock is significantly undervalued
  • This is unfair considering Intel has a long history of great profitability and market dominance
  • Buying INTC while it trades below $60 is the right to do
  • Going forward, I expect the current pessimism over Intel to eventually change. More investors will ultimately realize the inherent superiority of INTC over AMD
  • I Know First has a bullish one-year algorithmic forecast score for INTC.

Intel (NASDAQ: INTC) investors should not worry about the recent market share gain of Advanced Micro Devices (AMD). My takeaway is that AMD’s market share gain is mostly on cheap, low-margin laptops and desktop PCs. If it were not so, we would have noticed better profitability for AMD. Sad but true, the super bulls of AMD gave too much importance on Intel losing a few market share points to AMD.

I like AMD. However, the unmerited enthusiasm over AMD gave the stock a YTD gain of 62.78%. Sadly, INTC’s YTD gain of 8.08% showed fewer investors like Intel. This market bias toward AMD  is not going to last forever.

INTC stock prediction
(Source: Seeking Alpha)

In reality, AMD’s TTM net income margin is only 3.25%, and its gross margin is just 40.6%. Compare these margins to Intel’s A+ grade profitability. Intel’s TTM gross margin is 60.46%, and its TTM net margin is 28.05%. This super high TTM margin is notably higher than Intel’s 5-year average TTM net income margin of 20.98%.

INTC stock prediction
(Source: Seeking Alpha)

The improved profitability margin of Intel is in spite of AMD’s recent market share gain on PC processor sales. It goes to show that Intel still enjoys pseudo-monopoly on server processors and mid-range to high-end PC processors. AMD bulls will eventually realize that market share gains is inutile if it does not lead to better profitability.

You know INTC is the safer investment. It still dominates every aspect of the x86 processor market. AsQ2 2019 AMD’s desktop processor market share is only 17.1%. AMD’s market share in server processors is only 3.4%, and in laptops 14.1%.

INTC stock prediction
(Source: Mercury Research/Tom’s Hardware)

It’s Time To Exploit Intel’s Undervaluation

The biased market sentiment for AMD has grossly undervalued the much stronger company, Intel. Now is therefore the right time to exploit this aberration. Judicious investors know that Intel’s forward P/E (GAAP) of 12.38x is too low when compared to AMD’s 64.28 and Nvidia’s (NVDA) 41.61x forward P/E ratios.

INTC stock prediction
(Source: Seeking Alpha)

It is an aberration that investors only gives Intel a low TTM Price/Sales valuation of 3.26x. Intel generates far more annual revenue and net income than AMD. The uncertainty of the future convinced that the bigger company with stronger sales and profitability would prosper against unexpected difficulties.

On a five-year comparison, Intel actually achieved better average annual revenue growth rate. The 5-year revenue CAGR of AMD is -0.04%. Intel touts 5.48%.

INTC stock prediction
(Source: Seeking Alpha)

This article was not intended to disparage AMD’s stock. I only wanted to highlight that if you like AMD, you should also invest in INTC. Intel and AMD are the duopoly in computer processors. I would only like to point out that Intel is the much bigger and more profitable firm in processors.


My final recommendation is that you should consider taking profits on AMD and use the proceeds to buy more Intel. I am not saying that you should sell all of your AMD stake. You could sell half of AMD and use the money gain to buy more INTC. I believe AMD has peaked and INTC therefore has the better chance to shoot up in price for the new 12 months.

The Christmas shopping season is coming soon. Many people will probably buy new desktop and laptop computers with their 13th month pay and Christmas bonuses. My bet is that Q4 new laptops and desktop PCs will still largely come with Intel processors inside.

Sad but true, most PC and laptop manufacturers still favor Intel processors. AMD might have competitive but cheaper Ryzen processors available. Unfortunately, most PC builders still treat them as second-class options. They will only buy Ryzen processors if they cannot get enough supplies of Intel-made processors.

The holiday PC shopping bonanza will likely help Intel end 2019 with a record annual net income of $22.5 billion to $24 billion. AMD’s failure to gain serious market share in the lucrative server processor market means Intel will beat its 2018 net income of $21.05 billion.

INTC stock prediction
(Source: Statista)

My strong buy rating for INTC is supported by its bullish one-year algorithmic forecast from I Know First. Any score above 100 (INTC has 102.94) is considered a bullish signal from I Know First’s stock-picking AI machine.

INTC stock prediction

Analysis of monthly technical indicators also endorse INTC as a buy right now. The chart below should convince you further to long on Intel’s stock as soon as possible.

INTC Stock prediction

Past Success With INTC Stock Prediction

I Know First has been bullish on INTC’s shares in past forecasts. On January 6, 2019, the I Know First algorithm issued a bullish forecast for Intel. The algorithm successfully forecasted the movement of the INTC’s shares. Until today, INTC’s shares have risen by 17.75% in line with the I Know First algorithm’s forecast. See chart below.

This bullish Intel stock forecast was sent to the current I Know First subscribers on January 6, 2019.

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Please note-for trading decisions use the most recent forecast.