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Intel’s Financial Outlook Spurs Investor Disappointment

Shares of Intel (INTC) wrapped up the week with a decline, as the company’s recent financial projections fell short of investor expectations. The upcoming days may bring a potential catalyst for change.

On Tuesday, Lip-Bu Tan will deliver the keynote address at an event tied to Intel’s Foundry division, marking his first major public statement as CEO following the company’s latest quarterly results presentation. Analysts from Bank of America highlighted that this event could coincide with announcements regarding collaborations with major technology enterprises.

Intel is actively working to expand its Foundry business. Initially announced early last year, the company aims to secure its position as the world’s second-largest foundry by 2030, trailing only Taiwan Semiconductor Manufacturing Co. (TSM). However, recent reports indicate a decline in 2024 foundry revenue, which surpassed $17 billion—accounting for approximately 30% of Intel’s overall revenue—while the company reported a widening operational loss.

This year has seen speculation that Intel might consider divesting a stake in its Foundry operations to TSMC; however, TSMC has denied any ongoing negotiations. Investors had been anticipating a potential spin-off or sale of the Foundry segment even before Tan stepped into the CEO role.

Market participants continue to watch for signs of impending deals. Growing optimism around various strategic moves, including the potential sale of the entire company, has influenced the stock’s movement over recent months.

Despite the prevailing uncertainty, Tan has emphasized the importance of cost reduction as a part of the company’s strategy. During the recent earnings call, while not making an official announcement, he suggested that layoffs are indeed on the horizon.

Bank of America analysts maintain a neutral stance on Intel’s stock, setting a price target of $23, which slightly exceeds the general market consensus provided by Visible Alpha. They noted that while Intel is “too big to turn around quickly, there is still room for strategic options.”

As of Friday’s close, the stock has seen a decline of over one-third of its value throughout the past year.

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