The Intel stock forecast was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary

• The predictive AI of I Know First has joined the general public’s pessimism lack of enthusiasm for Intel. My contrarian Intel stock forecast is that Intel is a very strong buy right now.
• Many investors dumped their shares after Intel’s outstanding Q2 ER. INTC’s stock price dropped more than 16% in just one day.
• This was due to Intel’s announcement that its 7nm node process is again delayed. Investors apparently got mad at Intel’s tardiness.
• More often than not, buying while the herd is panic selling can lead to future substantial capital gains.
• As per the massive revenue and net income Q2 numbers, Intel does not need to sell 7-nanometer processors anytime soon. Its 14-nm and 10-nm products still dominates.

My Intel stock forecast indicates that we should exploit the appalling one day -16.24% drop in Intel’s (INTC) stock price that happened last July 24. Buy more INTC because it is now trading at less than $51. Intel reported outstanding Q2 numbers. Instead of being appreciative that Intel is performing well during this pandemic, the stock market acted like an immature teen going into a big tantrum. This was due to Intel’s announcement that its 7-nanometer processors are delayed to 2022.

We should be grateful to those ingrate investors/traders who dumped their INTC holdings last Friday. They made INTC much cheaper for us. My intel stock forecast is still giving INTC a 1-year price target of $68.

Even the wise predictive AI of I Know First is no longer giving a bullish Intel stock forecast after July 24 big sell-off. This is excusable. The AI algorithm of I Know First is so advanced that it can now ride with (not against) the emotion of stock market players. The notable -16.24% one-day-only drop in Intel’s stock price says majority of investors despise INTC at the moment.

I am now using my natural intelligence to insist that INTC is a very strong buy. The July 24 punishment was unjustified. I’m now convinced that most investors are not thinking right because of this obnoxious COVID-19 pandemic. The future is very uncertain because of the current pandemic, and yet Intel reported very impressive Q2 numbers. I’m old and sickly but my eyesight is still fine. I could read and comprehend the magnificent numbers on the chart below. If all investors are in their right minds, INTC would be trading above $70 after Q2 ER. There is a global pandemic and yet Intel delivered a Q2 2020 revenue of $19.7 billion. This is 19.4% higher than Q1 2019’s revenue of $16.5 billion. Q2’s net income of $5.1 billion is

INTC is a very strong buy because its lucrative Data Center business is now generating bigger sales than its PC-centric business. Intel is not in a hurry to release 7-nanometer processors for the PC market because its priority now is data-centric products like server processors, AI accelerators, and cloud computing storage, and computer vision. Only 48% of Intel’s revenue now comes from the PC-centric business.

Intel Still Rules Supreme on PCs

Despite without having a 7-nanometer desktop/laptop processor, Intel still grew its PC-centric business 7% Year-over-Year in Q2 to $9.5 billion. Intel still rules supreme in laptop processors with more than 86% market share. For more than a decade n ow, laptops account for a super majority of new computers sold. Desktop computers only sold 88.4 million units last year, while laptops sold 166 million. The emerging trend is that by 2023 only 79 million desktop PCs will be sold and laptops will hit 171 million units.

The point is that Intel shrewdly delayed its 7-nanometer x86 PC processor because its 10nm meter desktop and laptop processors are still far outselling the best of AMD’s “7-nanometer” Ryzen products manufactured by TSMC. The delay was a display of confidence (not arrogance) on the part of Intel. Intel was in fact saying its 10nm manufacturing node still produces the best performing PC processors in the planet today. I believe most gamers and business users still prioritize performance over energy savings when it comes to their desktop or laptop computers.

This is something most investors do not seem to comprehend. We should not compare manufacturing nodes on a nomenclature basis. Any semiconductor foundry like Intel and TSMCA can call its manufacturing nodes anything they want. A “smaller” node-manufactured processor does not automatically lead to better performance. It only leads to a better energy efficiency.

Intel is Rich, Powerful, and Super Affordable

Thanks to the warped perception of most investors, Intel’s stock is now trading at less than 10x TTM GAAP P/E. This was due to the big sell-off on July 24. The market took it very wrong that Intel decided to delay its 7nm note chip manufacturing. The mistake of the majority should be exploited. The supreme leader of the x86 PC and server processor industries is super undervalued compared to Advanced Micro Devices (AMD) and Nvidia (NVDA).

The market is in love with the misleading mirage of AMD. We should short AMD and go long on INTC. This is the perfect trade right now. It is not logical that AMD has a TTM GAAP P/E valuation of 162.88 and INTC only has 9.29.

Intel deserves higher valuation ratios based on its much superior profitability. Intel is dominant and very profitable. Any K-12 graduate will immediately put higher valuation for INTC because it is safer to invest in the most profitable companies. AMD is a low-profit company because its net income margin is only 6.72%. Intel touts a net income margin of $29.97%. This is slightly higher than GPU-centric Nvidia’s 28.18.

Intel’s decades-long dominance of the x86 PC and server processor market is why it has always been profitable. Consistent profitability has made it a decent dividend payer. Consistent profitability has helped Intel achieve massive, multi-billion-dollar acquisitions. Thanks to it being a serial acquirer, Intel is a well-diversified company that is not reliant on PC sales.

Conclusion

Intel’s CEO Bob Swan is a finance guy. I suspect it was intentional on his part to do a downer announcement on Intel’s impressive Q2 press event. Intel is likely planning a massive share buyback after this COVID-19 pandemic gets solved. Intel is authorized to do buybacks worth $110 billion years ago. Out of that amount, $19.66 billion is still available as of June 2020. It plays good on management’s image if they can do billions of dollars’ worth of buybacks at $50, rather than at $60.

The finance background of Bob Swan and his don’t-give-a-damn approach to leading Intel is a strong reason why you should buy more INTC. I am not previously enthusiastic about Intel’s discrete GPU ambition. However, my fearless forecast is that Bob Swan is devious like me. Swan will probably go big on consumer and data centric GPUs next year. This is just to disrupt AMD and Nvidia’s GPU future.

Intel selling discrete GPU cards to PC gamers and AI Accelerator/Deep Learning GPU processors to data centers could surely boost its stock to beyond $70 before 2021 ends.

Past I Know First Intel Stock Forecast Success

I Know First has a history of successful bullish Intel stock forecasts. On February 20, 2020, I Know First’s algorithm predicted a bullish 12-month trend for INTC. This forecast accurately predicted an increase in INTC stock price.

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