Intel’s stock jumped nearly 7% Thursday to $43.35, the shares’ highest point since June 2022, after an investment analyst upgraded the company and issued a glowing report about the chipmaker’s forthcoming products and partnerships.
“We believe (Intel) is lining up significant new server product launches and foundry customer announcements in the next six months,” Mizuho Securities’ Vijay Rakesh wrote in a note to clients late Wednesday.
Intel is preparing advanced chips for artificial intelligence and data centers, according to Rakesh, which could help the company retake market share it has shed over the past five years. And he expressed optimism that the chipmaker will sign up big-name clients to manufacture chips in Intel’s factories, a practice the industry calls foundry work.
Intel is Oregon’s largest corporate employer, with 22,000 workers at its Washington County campus. Stock incentives are a major part of the company’s compensation package, so the rising share price will be very welcome to workers who had watched the value of their stakes dwindle by more than half during two difficult years.
The company plans a major Oregon expansion, spending billions of dollars by the end of the decade to add a fourth phase of its D1X research factory in Hillsboro and upgrade older facilities. Intel plans to add 2,000 Oregon jobs, according to plans filed with the city.
Intel is coming off a long stretch of abysmal financial reports. The company was weighed down by a cooling global economy and a series of manufacturing failures that cost Intel its technological lead. Sales fell 20% last year, and Intel posted rare financial losses late in 2022 and early this year.
Even as sales were falling, CEO Pat Gelsinger committed Intel to spend tens of billions of dollars to build new factories around the world and to upgrade its engineering in hopes of making its chips more competitive.
Investment analysts decried Gelsinger’s spending and strategy and as revenues declined Intel slashed its dividend, laid off employees and cut worker pay. Shareholders jumped overboard, driving Intel shares under $25 even as rivals AMD and Nvidia soared.
Intel posted unexpectedly strong financial results last summer, though, and last month it forecast solid revenue growth in the months ahead.
While the company is still playing catch-up in an increasingly competitive market, a consensus is building on Wall Street that investors had been far too pessimistic about Intel’s prospects. Intel’s stock is up 74% since February.
The company’s forthcoming data center chips stand to be “very competitive,” Rakesh wrote. He said 2024 could be one of Intel’s “most prolific” for new products in years.
— Mike Rogoway | [email protected] | 503-294-7699
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