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Sitting Near 52 Week Lows, Why Is Intel Stock (NASDAQ: INTC) Down?

Analyst Team trader
Updated 5 Jun 2024

Intel's share price (NASDAQ: INTC) has been hovering around 52 week lows over the last month, with shareholders finding themselves 37.18% in the red year to date. With new deals, and announcements on the horizon, you have to begin to wonder why Intel is down so much, and what it might take to shift sentiment.


In news today, Intel Corp confirmed it has entered a landmark joint venture with funds managed by Apollo Global Management, with plans to invest €11 billion into the expansion of its semiconductor manufacturing facility in Leixlip, Ireland. This strategic move is aimed at fortifying the semiconductor supply chain and enhancing its resilience and sustainability, ultimately bolstering Intel's position in the global microchip industry.

David Zinsner, Intel's Chief Financial Officer, emphasized the significance of the investment, signaling the company's commitment to reinforcing the supply chain in the face of growing global demand for semiconductors. Intel's plan includes the manufacturing of wafers, which are pivotal to the company's efforts to carve out a larger share of the semiconductor fabrication market.

Despite recent struggles within Intel's foundry division, CEO Pat Gelsinger has remained focused on reviving the company's fortunes. Intel has grappled with the challenge of winning over blue-chip third-party customers but is now poised to redefine its competitive edge against semiconductor heavyweights like TSMC and Samsung.

In response to the mounting pressures of competition, Intel has already felt the impact of this commitment with the opening of the Fab 34 facility in Ireland in September 2023—an integral component of its broader expansion strategy.

Having a class action lawsuit filed against the firm has also done little to help the stock, with the internal foundry model being a big part of that.

Coming from Computex yesterday, Intel also unveiled Xeon 6 processors with Efficient-cores, or “E-cores,” that it says deliver “performance and power efficiency for high-density, scale-out workloads in the data center.” Along with this, Lunar Lake, set to be the flagship processor for Intel was also revealed. Said to deliver a lead in graphics, and AI processing power, Intel has scheduled for a Q3 release.

Latest releases, new investment, and strategic shifts will give some confidence in the forward looking strategy, but in the short term this does little to help beleaguered shareholders who must be looking at some of the competition such as AMD, and envying the operational success that have delivered 15.45% gains through 2024 against their own 37% losses.

In a nod to some of the difficulties being faced by local manufacturers, the U.S. government, recognizing the strategic importance of domestic semiconductor production, has provided grants under the 2022 Chips and Science Act to support Intel's foundry ambitions. This governmental support highlights the role of public policy in shaping the prospects of key technology sectors.

Whether Intel shares now reflect a buy down at this level needs some careful consideration, the fundamentals will likely play a key part in this, and trying to ‘catch a falling knife' as the saying goes can be a very dangerous game. INTC stock trades up 1% in the premarket.

The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.