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Is Intel the hottest stock to buy next week after the Presidents' Day Holiday?

February 15, 2025

Is Intel the hottest stock to buy next week after the Presidents' Day Holiday?

Yes, Intel Corporation (INTC) is on fire and still has some upward lift momentum this month. Intel, an S&P 500 company, experienced a remarkable surge in its stock price this week, rising approximately 27% over the past four trading sessions. This was Intel's most significant four-day gain since 1987. 

Intel's upward momentum is being attributed to Vice President JD Vance's remarks at the AI Action Summit in Paris, emphasizing the Trump administration's commitment to bolstering domestic semiconductor manufacturing. There is speculation about potential collaborations between Intel and Taiwan Semiconductor Manufacturing Company (TSMC), possibly involving joint ventures to enhance chip production capabilities in the U.S. 

Despite this recent rally, analysts maintain a cautious outlook on Intel's stock. According to 26 analysts, the average 12-month price target is $25.69, suggesting a modest upside of approximately 8.86% from the current price of $23.60. The consensus rating remains "Hold," reflecting uncertainty about Intel's long-term growth prospects amid ongoing challenges in its core server and PC businesses. 

Intel Corporation, founded in 1968 by Robert Noyce and Gordon Moore, is a leading global designer and manufacturer of semiconductor products. The company offers a diverse range of products, including microprocessors, chipsets, and embedded processors, serving sectors such as computing, networking, data storage, and communications. Headquartered in Santa Clara, California, Intel operates worldwide, catering to various industries like media, financial services, healthcare, government, manufacturing, retail, education, industrial, and transportation. 

In the past years, Intel has faced significant challenges impacting its stock performance. In 2024, Intel's stock experienced a substantial decline of approximately 60%, attributed to stagnant revenue growth, shrinking earnings, and increased competition from rivals such as AMD and Nvidia. Intel has grappled with manufacturing setbacks, quality control issues, and missed opportunities in emerging markets like AI, leading to a loss of market share and declining revenues. The company's delayed adoption of advanced technologies, such as AI and GPUs, has allowed competitors to gain a technological edge, further impacting Intel's market position. 

In December 2024, CEO Pat Gelsinger retired abruptly after less than four years, following strategic missteps and financial losses. This leadership change introduced uncertainty and affected investor confidence. 

Despite these setbacks, recent developments indicate potential for recovery. In February 2025, Intel's stock surged by 23.6% over five trading days, marking its best weekly performance since mid-January 2000. This uptick is partly due to speculation about a possible partnership with Taiwan Semiconductor Manufacturing Company (TSMC) and government initiatives to promote domestic AI chip manufacturing. 

In our view, the recent news about Deepseek, the Chinese generative AI based on "old school" chip neural networks instead of state-of-the-art NVIDIA's GPU's, is a net positive for Intel. We believe that Intel was punished in the market for missing the NVIDIA GPU train, which at some point experts thought would be the sine qua non for AI. Deepseek is beginning to shatter the myth that generative AI is only possible with state-of-the-art and super expensive GPUs. This could prove very uplifting for Intel who has plenty of expertise in "old school" or classical chip technology. We see Deepseek as a net positive for Intel with potential to keep lifting its market valuation and stock price. 

In summary, while Intel has faced considerable challenges over the past year, U.S. government domestic preferences, strategic partnerships, new leadership, a renewed focus on innovation, and a potential Deepseek-inspired renaissance of classic CPUs in the AI space worldwide, signal good times ahead for Intel. The Creatix fund began a small position when Intel was trading at a 60% "clearance" sale price. We intend to add a few shares next week, hopefully grabbing them at below $24 each. The Creatix 12-month forecast for Intel shares is $30, for an "easy" 25% gain. Of course, we may be totally wrong as we have been many times in the past. You have to keep trying. 

Now you know it. 

www.creatix.one

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