Intel: Revival on the Horizon? An In-Depth Analysis and Investment Opportunities for 2024

Reasons for Intel's Devaluation

In recent years, Intel has faced numerous challenges that have negatively impacted its stock performance.

Intense Competition
Fierce competition from Asian companies with lower costs, such as TSMC, has reduced the American company's operating margins.

Increased R&D Spending
Additionally, Intel has had to significantly increase its spending on research and development, leading to the establishment of Intel Foundry in February 2024. This project aims to internalize chip production, reducing operational costs through strategic partnerships and acquisitions. For example, Intel has collaborated with Microsoft and over 300 other partners in the United States to improve efficiency and reduce costs, acquiring companies like Silicon Mobility, which specializes in electric vehicles, and Articulate, active in the artificial intelligence sector.

Growth Prospects

Despite recent difficulties, the growth prospects for Intel are promising.

Earnings Growth
Forecasts indicate an 85% growth in earnings per share (EPS) in 2025 and a 50% growth in 2026, a notable improvement compared to the current growth of 3%. Furthermore, the US government has allocated significant funds to Intel through the Secure and Clay program, further strengthening the company's financial position.

Key Statistics
Approximately $3.5 billion of government funds allocated to Intel through the CHIPS Act of 2022 have been reassigned to the Secure and Clay program, supporting Intel's operations in the national defense sector.

Fundamental Analysis

According to fundamental analysis, the intrinsic value of Intel shares is significantly higher than the current market price. Using methodologies such as discounted cash flow, Peter Lynch's method, and economic value added, the fair value of Intel shares is estimated to be around $49.20 per share. This suggests that the stock is currently undervalued by 50%, representing an interesting investment opportunity for long-term investors.

Technical Commentary: Gann's Square of 144
The "Square of 144" chart by Gann applied to Intel's stock shows a series of geometric configurations highlighting key price and time levels. This tool, developed by the famous trader W.D. Gann, is used to identify price/time levels, relative reversal points, and market cycles.

Observing the chart, we notice that Intel's price has reached a critical support zone between $30.50 and $29 per share, where the price is consolidating after a long descent from the historic high. This support area is further reinforced by the convergence of Gann's fans, indicating a potential medium-term trend reversal.

Valuation and Trading Strategies

For traders, the current price level represents a buying opportunity. We recommend placing stop losses below the 2022 low at around $24 per share, with a target price between $42 and $45, representing a potential increase of 40% from the current price.

Conclusion

Intel represents an interesting investment opportunity for those seeking a mid-term investment. Despite recent difficulties, growth prospects and technical evaluations indicate that the stock might be undervalued and ready for a recovery. Follow us to stay updated on future evaluations and strategies.