Do you remember how Intel (NASDAQ:INTC) was the object of scorn in 2022 and early 2023? Now, Intel is finally getting its due respect. Consequently, INTC stock has rallied, but this is a time to let your winners run, not take your chips off the table.
Don’t get the wrong idea. Intel will have to face several challenges in the new year. As we’ll discover, the company is encountering difficulties in Europe. Intel stock investors can rest assured that their shares will gain value in the long run.
Bad and Good News for INTC Stock Investors
Intel wants to establish chip-making plants in Europe and specifically in Germany. According to a Reuters report, “Berlin had agreed [to] subsidies worth nearly 10 billion euros with” Intel.
Unfortunately, Intel’s plans appear to have hit a speed bump. A “negative court ruling on German finances… could cost Intel billions of euros in subsidies for planned chip-making plants in the state of Saxony-Anhalt,” Reuters reported. This update comes from Sven Schulze, economy minister of Saxony-Anhalt in Germany, via a magazine called WirtschaftsWoche.
On the other hand, Intel may receive a funding package worth millions of dollars from the U.S. government. The funding’s purpose would be “to make microchips for military applications,” Barron’s reports. You’ll definitely want to check back, as this story is still in progress.
Intel Stock Gets a Notable Upgrade
Meanwhile, it looks like Intel is finally getting some love on Wall Street. Mizuho Securities analyst Vijay Rakesh upgraded Intel stock from “neutral” to “buy” and raised his price target on the shares from $37 to $50.
Rakesh now sees Intel as being “refocused on a better 2024 estimated” data center and personal computer “road map.” This could drive Intel’s turnaround story after the company lost market share in these segments and, Rakesh posits, help improve Intel’s margins.
Certainly, the price-target raise from $37 to $50 is eye-opening. Don’t be too quick to jump into a trade with INTC stock, though. You’ll first want to conduct your due diligence on Arm (NASDAQ:ARM), a U.K.-based microchip designer.
Intel is investing in Arm, and it’s not a small stake. Specifically, Intel disclosed a position of 1,176,470 Arm American depositary receipts. Hence, if you’re investing in Intel, you’re also indirectly investing in Arm.
INTC Stock: Look Beyond $50 to Higher Targets
Are you bullish on both Intel and Arm in 2024? If so, then do the necessary research and consider a share position in Intel stock.
Rakesh envisions INTC stock reaching $50, but you don’t have to take profits if the stock gets there. If and when the market decides it likes Intel’s underdog-to-power-player story, the $50 price target will be old news and investors should target $90, $100 and even higher than that.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
