Intel has announced plans to lower its global headcount by more than 20% under the leadership of Lip-Bu Tan, who has been at the helm for a couple of months only.
In its latest reported quarter, the semiconductor giant came in ahead of Street estimates on both the top and bottom line as well. Still, Intel stock remains in shambles.
And it may continue to struggle until the company’s new chief executive announces a big change that markets have been anticipating for a while now, said Susquehanna analyst Christopher Rolland in a recent CNBC interview.
Intel stock could benefit from a breakup
According to Christopher Rolland, Intel is “dead money in its current strategic form.”
However, a potential split of its business – a strategic move that separates its manufacturing unit from production divisions could unlock significant value for shareholders, the analyst argued.
Rolland sees it as a “viable path forward” for Intel, particularly because the Trump administration has been fully committed to onshoring production this year.
Top it off with the firm’s 18A process node that’s gaining traction lately, and you have yourself a semiconductor stock that “may have a chance” in keeping relevant in an increasingly AI-centred global market, according to the Susquehanna analyst.
Note that Intel stock currently pays a dividend yield of 2.57%, which makes it a bit more attractive to own in 2025.
18A success could save INTC shares in 2025
Intel’s aforementioned manufacturing process is reportedly facing initial challenges but has started gaining interest from a number of tech companies.
There have been rumours of potential large-scale foundry deals with companies like Microsoft, and talks are also underway with Google.
Intel is aiming for high-volume production in the second half of 2025. Provided that it successfully delivers on that commitment, hyperscalers could increasingly turn to INTC, given the federal push to manufacturing in the US.
This may help remove a major overhang from Intel shares – the lack of a big customer. Note that the semiconductor stock is currently down some 30% versus its year-to-date high.
Is it worth investing in Intel this year?
Until Intel announces the separation of its two core businesses and ramps up its 18A process, however, INTC stock is much like “dead money”, as per the Susquehanna analyst.
Christopher Rolland currently has a “neutral” rating on Intel shares also because the likes of AMD are stealing its market share, and the signs of a pick-up in PC demand the company talked about on its Q1 earnings call may only have been a pull forward due to tariffs.
Other Wall Street analysts agree with Rolland’s neutral rating on Intel stock as well. However, the mean target of about $24 still indicates potential upside of more than 20% from here.
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