Intel Corporation (NASDAQ: INTC) is in the spotlight these days after the stock was upgraded by Morgan Stanley in February. Morgan Stanley analyst Joseph Moore upgraded Intel stock to “Overweight” rating from “Equal Weight” increasing his price target to $64 from $55. The analyst showed confidence in Intel’s leadership. He said that Intel’s CEO Bob Swan is a more “financially oriented” CEO which will prevent the company from balancing its act between technology and finance. The analyst likes Intel’s high cash flow priority and higher standard of M&A accretion. However, Moore said that Intel still remains susceptible to the semiconductor industry’s cyclical nature.
Will Bob Swan Delivery?
The Wall Street is hopeful that Intel’s new CEO Bob Swan will successfully turn the tide in favor of Intel Corporation (NASDAQ: INTC). The newly appointed executive recently said that the company’s investments in 5G technologies, including cellular modems, and Optane high-performance memory, will pay off in the future. Swan accepted that Intel’s ventures into cellular-modem technology haven’t been successful for now, but said these investments take time to show their results.
The 5G Catalyst
Intel recently announced that its 5G cellular chips will start rolling out in the product market in 2020. Analysts believe that Apple will start using Intel’s 5G chips from 2020. Intel is also diversifying its business for mobile chips, cutting its reliance on Apple. The new leaderships is focusing on selling chips to car companies. Intel’s biggest strength in this area is Mobileye, the Israel-based driver-assistance systems company it bought in 2017 for $15.3 billion
In January, Citi increased its price target for Intel Corporation (NASDAQ: INTC), citing upcoming higher demand of microprocessors. Citi’s new price target for Intel is $54. Piper Jaffray’s senior analyst Craig Johnson is also hopeful that Intel stock will rise, despite the short-term concerns. Johnson, based on his technical analysis, believes that Intel is on its way to cross $60.
Foveros 3D: A Game Changer
Another interesting catalyst for Intel stock is Foveros 3D stacking technology that was recently revealed at MWC 2019 Barcelona. The technology is a game changer for the CPU hardware industry. Foveros will make it possible for manufactures to use stacking of chiplets to add extra power in semiconductors. Like several other futuristic technologies Intel is working on, Foveros will also take its time and course before paying off.
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Author does not have investment in stock discussed in this article.