Intel Stock (NASDAQ:INTC) Slides While Fighting TSMC's 'Trump Boost'
In a bit of an unexpected twist, Taiwan Semiconductor (TSM) recently managed to land what some called a ' Trump boost,' gaining approval from the Trump Administration for bringing in hefty new investment plans to the United States. That left chip stock Intel (INTC) on the back foot, as it struggled to get such investment going that would instead be largely taxpayer-funded. But reports suggest that Intel may have a plan to fight back. Investors, however, were skeptical. They sent Intel shares down nearly 2.5% in Wednesday afternoon's trading.
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Intel does have a plan to beat Taiwan Semiconductor, reports noted. This actually makes sense given what we have seen of Intel in the last few weeks. While certainly, Intel's struggle is uphill—its cash flow is in open decline and there have never been quite so many and so many different competitive forces arrayed against it.
But Intel is putting a lot into its comeback tour: huge bets on new machinery to augment its foundry ambitions, the new 18A process that is delivering some huge new possibilities, and a set of massive layoffs that are paring down Intel's expenses at a time when it is looking to fire up its revenue generation. With one variant of the 18A process already able to compete with Taiwan Semiconductor directly, the idea that Intel could take on, and maybe beat, this latest rival is entirely feasible.
But What About Intel Capital?
One point that new CEO Lip-Bu Tan revealed recently was that Intel Capital—the investment arm of Intel—would not be getting spun off after all, at least, not any time soon. Intel revealed back in January that Intel Capital would be its own operation, but with Lip-Bu Tan's arrival, that came to a halt. In fact, there are signs that Lip-Bu Tan will be looking for Intel Capital to provide some of that capital to Intel itself.
Tan noted, 'We have made the decision not to spin-off Intel Capital, but to work with the team to monetize our existing portfolio, while being more selective on new investments that support the strategy. We need to get our balance sheet healthy.' While there is no definitive word as yet on how far Intel Capital got setting itself up to go solo, it is likely that it at least started by now. And with the economy looking a bit shaky, now might not have been a good time for Intel Capital to go it alone to begin with.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 28 Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 33.67% loss in its share price over the past year, the average INTC price target of $21.04 per share implies 5.41% upside potential.
See more INTC analyst ratings
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