The Intel Stock Price Forecast 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.

Summary

• Intel’s stock dropped recently due to the noise that TSMC plans to build a $12 billion factory in the U.S.
• Another noise that contributed to the dip is from U.S. Department of Commerce’s decision requiring U.S. firms to acquire a license before they can sell products to Huawei.
• Learned investors should be deaf to the noise now, Intel is still a long-term winner. TSMC’s U.S. factory is not coming soon.
• There are other PC and smartphone vendors that could mitigate losing Huawei as a chip customer.
• INTC is still an embodiment of a callous market and undervaluation.

The stock of Intel Corp. (INTC) dipped in recent days because of the irritating noise from the plan of Taiwan Semiconductor (TSM) to build a $12 billion 5-nanometer chip factory in Arizona, United States. The other upsetting noise is from the U.S. Department of Commerce’s decision requiring American firms to get a license first before they can sell semiconductor products to Huawei. The market’s sensitivity to fud (fear, uncertainty, doubt) noise is why INTC now has a 3-month price return of -12.17%. INTC is the worst pummeled stock among semiconductor firms to date.

Investors should not pummel down INTC’s price because of these fud noises. It will take more than 4 years before Taiwan Semi can build, test, and operate its fabrication plant in Arizona. By that time, Intel should have upgraded its U.S. fabs to 7-nanometer or 5-nanometer manufacturing process. Intel can also easily get a license so it can continue supplying its chips to Huawei!

Huawei is not even among the top PC vendors yet. Intel’s only relationship with Huawei is in supplying the modem and CPU to the MateBook series of Huawei laptops. Losing Huawei as a client is not detrimental to Intel. The reality is top PC vendors continue to prioritize Intel’s processors for their consumer and business computers. OEM PC builders are only forced to use Ryzen processors because Intel still cannot produce enough processors to meet market demand.

Intel Is Still Winning With Its 14-nanometer Processors

Intel’s 14-nanometer PC and server processors still dominate against 7-nanometer CPUs of Advanced Micro Devices. Statista’s chart below denotes CPUs in use around the world. It covers PC computers only, not consoles or servers. AMD’s recent annual gains is due to its low-price marketing strategy too. Otherwise, 14-nanometer x86 processors that sells at higher price tags are still the priority of OEMs and PC assemblers.

The recent launch of Intel’s Comet Lake vPRO 10^th generation 14-nanometer processors (27 variants from Core i3 to Xeon) will again lead to more business customers to keep ignoring AMD Ryzen-equipped desktop and laptop computers. These new processors have mandatory/integrated Intel Hardware Shield. Business IT purchasers will therefore prioritize buying computers using these new vPro Comet Lake Processors. AMD’s Ryzen Pro has no comparable protection to Intel Hardware Shield. Intel Hardware Shield protects the BIOS and operating system from illegal tampering and other hacking attacks.

Business or enterprise PC buyers also will not mind paying a little more for Intel vPro processors-equipped PCs. They have corporate budgets that are more forgiving than those of ordinary consumers. They will keep buying Intel-powered laptops because of Project Athena. Intel’s vPro processors for laptops fulfills the noble mission of Project Athena to deliver more powerful but more energy efficient laptops/notebook PCs.

The universal adoption of Intel UHD Graphics 630 means vPRO Comet Lake processors can also power light-to-medium gaming PCs.

AI Algorithm And Technical Indicators Are Bullish On Intel

As per the chart below, monthly technical indicators and moving averages point INTC as a Strong Buy.

Intel’s shrewd and profitable tactic of releasing new iterations of its 14-nanometer processor designs is probably why predictive AI of I Know First has a bullish one-year forecast score for Intel’s stock.

Conclusion

INTC is a Strong Buy. It is very cheap to own. INTC only trades at 13.12 forward P/E. Shareholders of Intel should focus more on beautiful music and ignore the fud noise. It is a beautiful sound to hear Intel is helping health institutions build an AI system toward easier detection of tumors. Intel will probably sell lots of its Xeon server processors and Altera FPGAs to power an AI system that could be cloud-based and accessible to health professionals who need to detect tumors in patients.

The chart below also shows INTC’s forward EV/EBITDA of 8.08x is 40.98% lower than semiconductor sector’s average.

The gross undervaluation of INTC is pretty offensive. Intel actually touts better margins than its midget rival AMD. AMD can sell 5-nanometer Ryzen processors and Intel’s 14-nanometer processors will still outsell them. My fearless forecast is that Intel can maintain its 30% net income margin for many years to come.

It is also beautiful music to hear Nomura share my long-held conviction that the current pandemic is boosting cloud computing spending. Companies now are more eager to migrate their databases, payrolls, CRM, and other IT infrastructures to the cloud. This trend should help Intel sell more of its pricey, high-margin Xeon processors and server-grade SSD products.

No thanks to COVID-19, Intel will keep improving its already impressive 5-year EPS CAGR of 15.20%. Going forward, bulls will again rally behind Intel’s stock once they realize that Intel is a cheap profit machine investment pick.

Past I Know First Success with Intel Stock forecast

I Know First stock algorithm has made bullish suggestions on Intel stock forecast in the past. On October 30th, 2019, the I Know First algorithm issued bullish predictions for Intel. The algorithm successfully forecasted the movement of the INTC price. In 3 months, Intel stock price has risen by 17.98% in line with the I Know First algorithm’s forecast. See the chart below.

Here at I Know First, we use quant trading algorithms to correctly forecast assets’ price movement worldwide for short-term and long-term time horizons, ranging from 3 days to a year. Since 2011, we have also been providing daily market forecasts for forex forecasts and gold price forecast, as well as the latest AAPL news and aggressive stock forecasts. Today, we are producing daily forecasts for over 10,500 assets.