Intel stock soared 51% in eight days. Is it too late to buy them?

Intel shares are among the fastest-growing securities in the S&P 500 index thanks to an eight-day rally that increased the company's market capitalization by more than $100 billion, Bloomberg writes. Analysts are still divided on whether to buy them: some of them have reserved estimates, while others see the potential for further growth due to a possible business turnaround.

Intel shares have grown by 51% over the last eight trading sessions - a record for such a period, Bloomberg notes. The growth was supported by a series of positive news over the past two weeks. Against this background, investors began to wait for a business turnaround after several years of weak results and fears of losing technological leadership, the agency reports.

"Clearly the company is no longer in near-critical condition," said Thomas Hayes of Great Hill Capital, an investment firm with about $1 billion under management that owns Intel stock.

Intel shares have risen 69% since the beginning of the year. In the previous year, they rose by 84% after investments by Nvidia, SoftBank Group and the U.S. government. The value of the government's stake in Intel is now estimated at about $27 billion, which is more than three times the initial investment, Bloomberg notes. At the same time, the company's stock is still about 8.9% below its 2020 highs, while the S&P 500 index has risen more than 100% since then, helped in large part by the growth of major AI chip makers such as Nvidia, Broadcom and more recently Micron Technology, the agency notes.

The chipmaker's securities added 3.4% in trading on April 13.

A new spiral of growth in Intel shares began in April after the announcement that the chipmaker agreed to pay $14.2 billion for the purchase of half of the plant in Ireland from the investment fund Apollo Global Management. This step was perceived by investors as a signal of progress in the implementation of the business turnaround strategy, Bloomberg writes.

"The company is already operating in expansion mode, not survival mode," Thomas Hayes said.

In addition, the company's securities received an additional boost after Intel on April 7 announced that it had joined Elon Musk's Terafab project to develop semiconductors for Tesla, SpaceX and xAI. Intel shares were also supported by an agreement with Google, which plans to use future generations of Intel's Xeon processors in its data centers.

On April 10, Melius Research analyst Ben Reitzes maintained his "buy" recommendation and raised his target price on Intel shares for the third time since the beginning of the year - his target has been changed from $50 to $75. The analyst's estimate implies a 20% increase in the stock relative to the last closing price.

"The story around Intel continues to evolve rapidly. The investment message about the company's value as a strategic contract chip maker is essentially confirmed with each passing day," Reitzes wrote.

The market is "probably underestimating" Intel's long-term earnings potential, according to Seaport Group analyst Joe Goldberg. Despite "absolutely overheated" valuations in the semiconductor sector, Intel has a better chance of beating consensus forecasts, he said. "It will be much harder for Nvidia to significantly beat expectations this year, while Intel, which has had several weak years, has a better chance of performing better than forecasts," he said.

At the same time consensus of analysts remains reserved: out of 51 analysts only ten advise to buy shares and six - to sell. The rest adhere to the neutral position.

This article was AI-translated and verified by a human editor