Intel is the hottest technology stock right now, has added more than $100 billion to market value in less than 10 days
Intel’s stock has been among the S&P 500 Index’s most closely monitored in recent times. This surge followed the company’s remarkable recovery from a share price drop and has resulted in a gain of more than $100 billion in market capitalisation within just ten days. Several positive developments have contributed to the rise in the US chipmaker’s share price, raising expectations of a possible revival of Intel.According to a report by Bloomberg, Intel’s shares have risen 51% over eight consecutive sessions, which is its strongest such stretch on record. The company has also logged its best weekly performance since January 2020. The rally has also pushed valuations higher, with Intel trading at more than 90 times forward earnings, above levels seen during the dot-com period and significantly above the broader chip sector average.
What helped Intel’s recent run and why some analysts are still concerned
The report claims that the recent gains were triggered by an announcement from earlier this month that Intel agreed to pay $14.2 billion to buy back half of a plant in Ireland from Apollo Global Management, a move viewed as a sign of progress in its turnaround efforts.The stock received additional support last week after Intel said it would join Elon Musk’s Terafab project to develop semiconductors for Tesla Inc., SpaceX and xAI. Alphabet parent Google has also committed to using future generations of Intel’s Xeon processors in its data centers.The rally has pushed Intel’s stock gains this year to 69%, building on an 84% rise last year driven by investments from Nvidia, SoftBank Group and the US government. The US government’s stake in the company is now valued at around $27 billion, more than three times its initial investment and slightly below annual US spending on childcare services.Despite the recent rise, Intel’s stock remains about 8.9% below its 2020 peak, while the S&P 500 has gained over 100% during the same period, supported in part by chipmakers such as Nvidia, Broadcom and Micron.Moreover, Wall Street is still cautious about Intel. Of 52 analysts, only 10 recommend buying the stock, while 6 recommend selling it, the Bloomberg report noted. The figure is higher than usual for S&P 500 companies. Overall ratings are relatively low compared to other chipmakers, and the stock is trading about 27% above analysts’ estimates, suggesting it may have risen too quickly.However, some analysts advise looking at the long term. Intel is expected to report a small loss this year, but it could return to profit in the coming years, with earnings projected to grow steadily by 2027 and 2029.
