We recently published a list of 10 tech stocks to watch amid market volatility, according to Bernstein analyst. In this article, we take a look at where Intel Corporation (NASDAQ:INTC) is doing compared to other technology stocks to watch amid market volatility.
The last few weeks have seen a massive sell-off in the technology sector on the stock market, largely due to concerns about return on investment amid exploding investments in artificial intelligence (AI). Valuations have plummeted and fears have been stoked that the AI bubble in the market is about to burst. However, Stacy Rasgon, who has covered semiconductor stocks, one of the most significant sectors in the AI world, for over 15 years, advised investors to stay the course as fears of a bubble are overblown. Rasgon claims that while the probability of a bubble is 100%, he is convinced that now is not the time for it. He pointed to the very real and massive construction of AI data centers as an example, and predicted that it would last for a few years, driving AI stocks higher.
In a recent interview with IBD, Rasgon focused on semiconductor stocks, emphasizing that they have outperformed massively, especially in the AI space. However, he cautioned investors about potential upside for these companies outside of AI, such as in the PC or smartphone space, noting that while they are better than last year, they are obviously not growing as fast. He also added that outside of AI, demand for data centers, server CPUs and networking remained weak. Bernstein, the investment advisory where Rasgon plies his trade, recently unveiled a basket of prominent technology, media and communications stocks that have nearly 26% upside potential from the advisory’s price targets.
This list was created against the backdrop of concerns about the state of the U.S. labor market and consumer spending, as well as a potential artificial intelligence bubble. Bernstein analysts have advised investors to invest their money during this time of heightened market volatility. Several AI-related technology names are trading at huge discounts due to the sell-off. Some of these names are discussed in detail below. For more information on these companies, visit Top 33 AI companies to watch out for And 17 trending AI stocks according to the latest news and analyst ratings.
Our methodology
For this article, we selected companies that operate in the technology space and are on the radar of Wall Street analysts. We based this list on a major investor note from investment bank Bernstein. These stocks are also popular with hedge funds. Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (read more details here).
A technician solders components for a semiconductor board.
Intel Corporation (NASDAQ:INTC)
Number of hedge fund owners: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. The company has had a rough time this year as export licensing restrictions have affected its business with China. In the second quarter, the company delivered disappointing earnings numbers and fell short of market estimates on almost all financial metrics. It also initiated a 15% reduction in its workforce and plans to suspend dividend payments. Stacy Rasgon, senior analyst at investment advisory Berstein, warned investors about the company back in April. During an appearance on CNBC, the analyst acknowledged that he didn’t really know what to make of the stock because the company didn’t have an AI accelerator story that drove all the other names. He said his main takeaway from a Foundry Day organized by the company was to come back in 2030.
This skepticism is perhaps one reason why Bernstein gave Intel Corporation (NASDAQ:INTC) stock a Market Perform rating and recently cut its price target to $25 from $35. In an investor note, the advisor noted that the company’s second-quarter results were in question and its third-quarter outlook was disastrous, with the company experiencing a weaker-than-expected recovery in the second half of 2024 due to weaker macro data and some customer inventory adjustments.
Total INTC takes 8th place on our list of technology stocks to watch amid market volatility. While we recognize INTC’s potential as an investment, we believe some AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than INTC but trades at less than 5x earnings, read our report on the cheapest AI stock.
READ MORE: Michael Burry is selling these shares And Jim Cramer recommends these stocks.
Disclosure: None. This article was originally published on Insider Monkey.
