In a surprising turn of events, Intel Corporation (NASDAQ: INTC) has witnessed a significant surge in its stock price, climbing over 8% during Tuesday afternoon trading. This uptick comes despite the company’s impending loss of support from Apple for its Intel processors in Mac computers. Reports indicate that the latest version of MacOS, known as Tahoe, will mark the end of compatibility for several older MacBook Pro, iMac, and Mac Pro models powered by Intel chips.
While this development might seem alarming, investors reacted positively, viewing the situation as an opportunity rather than a setback. The transition away from Intel processors has been a gradual process for Apple, which has been shifting towards its own silicon for the past five years. Although Apple had previously assured Intel that support would continue for “years to come,” the expiration of this commitment is now on the horizon.
Brighter Days
So, what fueled this unexpected rally for Intel? Alongside the news of Apple’s transition, there were also positive developments in the broader chip sector. Renewed trade discussions between the U.S. and China have sparked optimism among investors, with hopes that these negotiations could lead to relaxed export restrictions. This sentiment provided a “halo effect” for Intel, contributing to its stock’s impressive gains.
Moreover, Intel is poised to benefit from initiatives at the Department of Defense (DoD). The DoD is expected to introduce operational technology-specific zero trust guidance, which aims to enhance cybersecurity measures for military systems. This includes critical infrastructure such as weapons systems and sensor arrays, further solidifying Intel’s role in the defense sector.
Is Intel a Buy, Hold or Sell?
As for Wall Street’s perspective, analysts currently maintain a Hold consensus rating on Intel’s stock. This assessment is based on one Buy, 26 Holds, and four Sells assigned over the past three months. Following a challenging year that saw a 33.76% decline in share price, the average price target for INTC stands at .29 per share, indicating a potential downside risk of 3.88% from current levels.
Investors are left to weigh the implications of Apple’s shift alongside the broader market dynamics and Intel’s strategic positioning within the defense sector. As the landscape evolves, the question remains: will Intel’s recent gains be sustainable in the face of these challenges?
