Is it advisable to chase Intel's stock higher? Focus on three key levels!

Recently, there has been significant news in the semiconductor industry — it has been mired in difficulties for many years.$Intel(INTC.US)$It unexpectedly attracted even$NVIDIA(NVDA.US)$All have chosen to cooperate with it and provide financial support. In addition to the backing of the U.S. government, Intel's influx of investments seems far from over. Has this once-glorious technology giant, which has experienced ups and downs, become a potential stock that investors can confidently pursue? Next, let us delve into Intel's path to recovery and investment prospects.

The influx of Intel's investments and stock price performance

Before the wave of investments in Intel, the Trump administration pointed out that Intel's CEO, Pat Gelsinger, had a significant conflict of interest due to his relationships with Chinese companies and demanded his immediate resignation. However, after Gelsinger's meeting with Trump, the latter changed his tone, calling Gelsinger's success and rise "remarkable." Since then, Intel seems to have been infused with new vitality, embarking on a journey to attract numerous tech giants to invest.

First, SoftBank Group invested $2 billion, and its CEO Masayoshi Son stated that this investment represents the company's belief in the further expansion of advanced semiconductors in the United States. Subsequently, Intel received support from the U.S. government, which acquired nearly 10% of its shares for almost $9 billion, becoming Intel's largest shareholder. Following that, industry leader NVIDIA announced a $5 billion investment to collaborate with Intel on developing AI infrastructure and personal computing products. Recently, there have even been reports that$Apple(AAPL.US)$It is also expected to join this "battle group."

From Trump's posts targeting Intel, to his change in attitude, and then to various tech giants announcing their investments in support, Intel's stock price has risen by as much as 85% to date. What charm does this long-silent company possess that has led many giants to compete for shares? The following is a summary of guest opinions.

The reason Intel attracted major companies to invest.

1. U.S. Government Support and National Security Strategy

The U.S. government's investments hold significant importance for Intel. From the market's perspective, this strengthens the U.S. semiconductor supply chain, positioning Intel as a 'government-favored stake' in the American chip industry. Considering national security strategy, other companies may need to align with Intel through partnerships or collaborations. Many firms have requirements for building AI infrastructure and personal computing products, which creates substantial transformation potential for Intel’s foundry business.

2. Key Role in the AI Supply Chain and Domino Effect

The latest developments suggest that $Advanced Micro Devices(AMD.US)$ SoftBank Group may reach a certain cooperation agreement with Intel. From this perspective, Intel is poised to become a pivotal enterprise within the AI supply chain, attracting more companies to follow suit and creating a domino effect that will drive its future growth.

Analysis of Timing and Prospects for Investing in Intel

Is now an appropriate time?

Seeing Intel’s strong stock performance, many investors are eager to participate. But is now an opportune time to buy? Expert analysis suggests that while Intel’s Q3 or Q4 results may not meet expectations, the market might still assign it a premium. Investors should focus on three key aspects moving forward: progress in its foundry business, whether AMD and Apple will become major clients, and the launch of AI-related products (including data center and chip product performance in collaboration with NVIDIA).

Currently, Intel’s stock price largely reflects market optimism about the future; thus, even if earnings fall short, the negative impact on the share price may be limited. New partnerships with large companies are mostly confirmed, though there could be dynamics involving technology transfers or acquisitions with some small and medium-sized enterprises. From a long-term perspective, even if the current price approaches target prices set by major investment banks, high market expectations provide opportunities to speculate on several catalysts: under the current bullish market conditions, new drivers could lead to further premiums, prompting analysts to raise their target prices. Therefore, chasing at these levels is reasonable, but it is recommended to extend the investment horizon to one year or longer rather than focusing solely on six months.

Investment Risks and Mitigation Strategies

The market is also contemplating whether the current stock market valuations are too high or if there may be a healthy correction. Therefore, Intel's share price could experience a relatively significant correction. Investors are advised to hold some funds in reserve and add positions when the stock price declines by 10% or more.

Although Intel's share price has risen considerably this year, other stocks have performed even better with gains doubling. Based on Intel’s current valuation, its previous underperformance, lagging valuation, and the impetus from market capital flows suggest that a further 50% increase in share price is not out of reach. Investors need not be overly concerned about overvaluation or market volatility and are advised to maintain their holdings.

Whether Intel can leverage this wave of investments to achieve a true turnaround remains to be answered over time. However, for investors, while monitoring its investment opportunities, it is also crucial to carefully assess risks and formulate a prudent investment strategy.

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