We recently compiled a list of 10 Tech Stocks to Watch Amid Market Volatility, According to Bernstein Analyst. In this article, we’ll examine how Intel Corporation (NASDAQ:INTC) stacks up against other tech stocks to watch amid market volatility.
In recent weeks, a major selloff in the tech sector, driven largely by concerns about ROI amid rising capital spending on artificial intelligence (AI), has hit the stock market, sending valuations crashing and stoking fears that an AI bubble in the market could be about to burst. However, Stacy Rasgon, who has covered semiconductor stocks, one of the most important sectors in the AI world, for more than fifteen years, advised investors to stay the course, calling bubble fears an exaggeration. Rasgon says that while the odds of an air pocket, used to refer to stock drops, are 100%, he is confident that now is not the time. He cited the very real and massive AI data center buildout as an example, predicting that it would last a few years, helping to drive AI stocks higher.
In a recent interview with IBD, Rasgon focused on semiconductor stocks, noting that they have outperformed massively, primarily in the AI space. However, he cautioned investors about the upside potential for these companies outside of AI, such as in the PC or smartphone sector, noting that while they may be better than last year, it’s clear they won’t see rapid growth anytime soon. He also added that outside of AI, demand for data centers, server processors and networking remains weak. Bernstein, the investment advisory firm where Rasgon practices, recently revealed a basket of leading technology, media and communications stocks that had upside potential of nearly 26% relative to the advisory firm’s price targets.
The list comes amid concerns about the state of the U.S. labor market and consumer spending, as well as a potential bubble around artificial intelligence. Bernstein analysts have advised investors to put their money to work during this period of heightened market volatility. Several AI-related tech names are trading at very low prices due to the selloff, with some of these names detailed below. You can find more information on these companies by going to The 33 Most Important AI Companies You Should Pay Attention To And 17 Hot AI Stocks According to Latest News and Analyst Ratings.
Our methodology
For this article, we selected companies that are in the technology space and are in the crosshairs of Wall Street analysts. A prominent investment note from investment bank Bernstein served as the basis for this list. These stocks are also popular with hedge funds. Why do we care about stocks that hedge funds are heavily invested in? The reason is simple: Our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, outperforming its benchmark by 150 percentage points (see more details here ).
A technician solders components for a semiconductor board.
Intel Corporation (NASDAQ:INTC)
Number of hedge fund holders: 75
Intel Corporation (NASDAQ:INTC) markets key technologies for smart devices. The company has had a tough time this year as export licensing restrictions have impacted its business with China. The company reported disappointing second-quarter results, missing market estimates on nearly every financial metric. It also initiated a 15% headcount reduction and plans to suspend its dividend. Stacy Rasgon, a senior analyst at investment advisory firm Berstein, warned investors about the company in April. During an appearance on CNBC, the analyst admitted he wasn’t sure what to make of the stock because the company lacked an AI accelerator that drove all the other names. He said his biggest takeaway from a foundry day the company hosted was to look back to 2030.
This skepticism may be one reason why Bernstein assigned a Market Perform rating to Intel Corporation (NASDAQ:INTC) stock and recently lowered its price target to $25 from $35. In a note to investors, the advisor noted that the company’s second-quarter results were in question and the third-quarter outlook was dire, as the company saw a more muted-than-expected second-half 2024 recovery amid macroeconomic weakness and customer channel adjustments.
INTC global ranks 8th on our list of tech stocks to watch amid market volatility. While we recognize INTC’s potential as an investment, our conviction lies in the belief that certain AI stocks have more promise to deliver higher returns, and in a shorter time frame. If you’re looking for an AI stock that has more promise than INTC but is trading at less than 5x earnings, check out our report on the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.
