Intel Corporation (NASDAQ: INTC) has soared in 2023, recording significant gains of 65.76% year-to-date, emphasising its renaissance in the semiconductor industry. The company’s strategic shift towards data-centric domains like AI and autonomous driving has been a pivotal driver of this surge. This transformative move, alongside the high praise from key analysts, has bolstered market sentiment.
The recent quarterly report witnessed Intel exceeding market expectations by 95% in EPS and posting revenue nearly 5% ahead of forecasts. This trend towards surpassing consensus estimates has been consistent over the last three quarters, depicting a robust growth trajectory. Furthermore, confident endorsements from Mizuho Securities and noteworthy insider activity, particularly CEO Patrick Gelsinger’s significant stock acquisition, underscore the positive sentiment surrounding Intel’s outlook.
However, concerns over a slowdown in growth and declining PC shipments in previous years remain, reflecting in a forward P/S ratio slightly above the five-year median. Forecasts anticipate a 50% earnings contraction in the current fiscal year, followed by a resumption of growth in the subsequent year.
Technical Analysis (1-Week):
Intel’s recent price action indicates a bullish momentum, propelled by a high-volume break above an ascending channel pattern. The positioning of the price action above key moving averages, such as the 100-SMA (orange line) and 50-SMA (blue line), depict a bullish trend, although the 200-SMA (red line) remains a significant challenge.
The RSI’s sharp increase to 69.57 suggests strong buying interest, positioning the stock for potential short-term opportunities higher. Looking ahead, short-term bullish scenarios could unfold if the stock maintains its upward momentum. Key resistance levels at $47.46 and $52.50 may come into play. Conversely, bearish pressures could lead to a test of support at $37.13, and a breach may expose the $31.98 support levels.
Summary
Intel’s fundamental strength and positive market sentiment indicate a potential for continued upward movement. Initial resistance at $47.46 could be surpassed, aiming for $52.50. Alternatively, a retreat could find support at $37.13, but breaching this might test lower levels around $31.98.
While technical hurdles persist, Intel’s solid fundamentals present opportunities that are slightly in favour of upward movements in the stock in the short term.
Sources: TradingView, Intel, Zacks, Reuters, MT Newswire, Dow Jones Newswire, Seeking Alpha.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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