The actions of Intel, which is listed on the Buenos Aires market through its Cedearcurrently hovering around $19 per share, marking their lowest level in more than a decade. Is it possible for these shares to triple in value in the next few years? Although it may seem exaggerated, it is worth remembering that, just three years ago, their shares were trading around $60.
Despite facing numerous challenges, such as a declining PC market, losing market share to server giant AMD, significant manufacturing errors, and the transition to the era of generative AI, Intel has several initiatives underway that could turn things around.
For example, This Monday, September 16, Intel shares climbed 4% after Bloomberg News reported that the American chip manufacturing giant officially qualified to receive up to $3,500 millions in federal grants to produce semiconductors for the Department of Defense.
The semiconductor industry
Bloomberg said Intel had reached a binding agreement with U.S. authorities. The pact is part of a secret program called Secure Enclave, which seeks to establish production of advanced chips with military and intelligence applications, Bloomberg reported.
The funding, which faced resistance from other chipmaking companies and concerns from lawmakers in Washington, could be announced as early as this week, according to Bloomberg.
Intel had previously received grants and loans worth Billions of dollars through the Chips and Science Act, which the US president, Joe Bidensigned in March. The law was part of a broader White House effort to revitalize the U.S. chipmaking sector and reduce the influence of Asian players.
The terms of the package, which aims to improve facilities in several US states are still being negotiated by Intel. The company has not yet received government funding.
Intel’s Cedear could triple its value
Intel’s share price has fallen more than 58% so far this yearas the company struggles to keep up with competitors like Nvidia in the race to make AI-optimized chips. In August, Intel announced plans to cut capital expenditures by 17% from a year ago, to $21.5 billion, and provided a third-quarter forecast that missed analyst estimates. Despite this, the company is confident that its future upgrades will put it on a level playing field with its competitors.
Volatility in the stock market
September and October tend to be the most volatile months for the stock market, especially during election years. This was recently discussed by Sam Stovallchief investment strategist at CFRA Research, who expects volatility to continue through the end of October.
Stovall points out that, While the S&P 500 recouped all of its losses from the 2022 bear market by January of this year and hit 22 new all-time highs in March, stocks have digested some of those gains and experienced a rotation into more defensive sectors. So the year started well, but markets have declined again. The average volatility of the S&P 500 in October 2023 was 35% higher than the average for the other 11 months of the year.
According to Stovall, investors should be prepared for this increased volatility as the market digests the Fed’s actions and their potential impact on the economy. The market is likely to remain uncertain until the Fed finds the right balance between slowing the economy and curbing inflation without causing a recession.
Buy the dip?
Tom Lee, managing partner at Fundstrat Global Advisors and head of research, has a similar view and suggests that investors should be cautious over the next 8 weeks due to uncertainty around the September election and cuts. He says that The stock market could experience a 7-10% correctionconsidering there have already been two 7% corrections this year.
Lee believes that at least a 5% drop can be anticipated, but if it is only 1-2%, then it will be insignificant. However, despite the caution recommended for the next 8 weeks starting in September, he believes that the volatility will not translate into a bad full year. He sees this drop as a buying opportunity, believing that the market has not yet peaked in 2024.
As long as Lee encourages investors to be ready to take advantage of dipswe are here with a list of the top stocks to buy now.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
