Intel (INTC -1.72%) The stock slipped again on Wednesday. The chipmaker’s share price was down 2.4% at 2:40 p.m. ET, according to data from S&P Global Market Intelligence. Meanwhile NVIDIA The share lost 2.8%.
Although there is no business-specific news today that is pushing Intel’s stock price down, the company’s stock price is falling in conjunction with price movements at Nvidia. The artificial intelligence (AI) leader is set to report its second-quarter results after the market closes today, and investors are nervous ahead of the release.
What does Nvidia’s Q2 report mean for Intel stock?
Nvidia stock has had a major impact on the valuation of semiconductor stocks and the market as a whole this year. The company’s results are used as a barometer to measure overall demand in the AI space and could cause significant fluctuations in Intel’s valuation.
Expectations are high for Nvidia’s Q2 report. The average analyst estimate calls for Nvidia to generate revenue of $28.7 billion — representing year-over-year growth of 112.4%. The median Wall Street target also calls for non-GAAP adjusted earnings per share of $0.65 — up 141% from the year-ago quarter’s split-adjusted earnings of $0.27 per share.
Even if Nvidia reports second-quarter revenue and earnings that beat Wall Street expectations, Intel and other AI stocks could face valuation volatility. If guidance falls short of expectations or the company announces a longer-than-expected delay for its next-generation Blackwell processors, semiconductor stocks could be hit by a bout of bearish sentiment.
Is Intel stock a buy?
Today’s sell-off puts Intel stock just above the 10-year low it hit earlier this month. The company’s share price has fallen 61% since the beginning of the year and is 71% below its 10-year high.
INTC data from YCharts
For risk-taking investors who see potential in the company’s efforts to compete with Nvidia and other AI leaders and dramatically expand its chipmaking business, the sharp decline in Intel stock could be a worthwhile buying opportunity. However, investors should approach Intel shares with the awareness that the company is still in the early stages of complicated restructuring and turnaround initiatives, and dramatic share price declines reflect uncertainty about whether the company can succeed with its comeback plans.
Keith Noonan does not own any of the stocks mentioned. The Motley Fool owns and recommends Nvidia. The Motley Fool recommends Intel and recommends the following options: short November 2024 $24 calls on Intel. The Motley Fool has a disclosure policy.
