The Intel (NASDAQ: INTC) stock price jumped sharply on Tuesday as investors cheered the company’s decision to take Mobileye public. The stock is trading at $52.70, which is a few points below its intraday high of $55. Still, the stock is about 21% below its year-to-date high even as its peers like Nvidia and AMD have jumped to an all-time high.
Intel and Mobileye
Intel has been going through a transformation under the leadership of Patrick Gelsinger, who became CEO early this year.
In the past few months, he has announced plans to invest billions of dollars in the United States. The company is building several factories that will see the company build its own and its customers’ silicone.
This is happening at a time when there are serious concerns about the reliance of Asian fab companies like Taiwan Semiconductor. Earlier this year, there were talks that the firm was considering placing a bid for Globalfoundries. The deal fell through and Globalfoundries went public. It has a market cap of more than $37 billion.
In a report on Tuesday, the Wall Street Journal said that the company was considering taking MobilEye public. The paper, citing sources, estimated that the company will be worth more than $50 billion. This will be a big win for Intel since it bought the Israeli company for $15 billion four years ago.
It will also be a notable thing for Intel since Mobileye contributes relatively tiny revenue for the company. In the third quarter, the company brought in just $326 million while Intel had more than $19 billion in revenue.
In my view, while Intel faces significant challenges ahead, I believe that its stock is relatively cheap as its transformation continues. Still, analysts have mixed feelings about the stock. For example, those at Northland Securities recently upgraded their outlook. However, those at BMO downgraded the stock while those at Wedbush, Bank of America, Evercore, and Credit Suisse have lowered their price target.
Intel stock price forecast
The daily chart shows that the INTC stock price has been under intense pressure lately. It has even moved to a bear territory, which is defined as when a stock falls by 20% from its high. Recently, it has formed a descending channel and moved between the 50% and 61.8% Fibonacci retracement level.
Today, the stock moved slightly above the upper side of the channel and the 50-day and 25-day moving averages. Therefore, there is a likelihood that the bullish view will continue in the coming weeks. This could see the stock jump to about $60.
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