Intel Stock Drops Sharply in 2025 Amid Rising Competition and Lower Price Targets
Intel shares fell significantly in 2025 following lowered price targets from Goldman Sachs and Bank of America, driven by concerns over weak guidance and fierce competition in the AI chip market.
Goldman Sachs and Bank of America have revised their Intel stock price targets downward, reflecting growing challenges for the chipmaker in 2024.
Highlights
- Intel's shares declined up to 13% following disappointing guidance for the current quarter, despite a strong first-quarter earnings beat.
- Goldman Sachs reduced their Intel price target to $34 per share and maintained a "sell" rating amid intense AI sector rivalry.
- Bank of America cut its target to $40 from $44, citing increased costs, slower growth, and strong competition.
On a turbulent trading day, Intel (INTC) shares dropped as much as 8.6% to $32.08, reaching their lowest level since June 2023.
Competitive Challenges Against Nvidia and Arm
Goldman Sachs analysts lowered earnings expectations for Intel between 2024 and 2026 by an average of 18%, emphasizing the company's struggle to keep pace with rivals Nvidia (NVDA) and Arm (ARM) in the data center market.
"Intel risks losing market share to competitors dominating the data center AI chip sector," noted Goldman analyst Toshiya Hari.
Bank of America echoed these concerns, pointing to higher operational costs and tougher market conditions as reasons for their price target reduction.
Limited AI Market Presence Weighs on Growth
The analysts highlighted that Intel’s modest exposure to AI-related demand, combined with underutilized manufacturing capacity and rising expenses, contribute to subdued revenue growth.
Despite these challenges, Bank of America acknowledged Intel’s strong enterprise customer base, US manufacturing footprint, and potential for a turnaround.
The AI boom has accelerated demand for cutting-edge chips, benefiting rivals like Nvidia, Arm, and AMD, whose stocks have outperformed Intel significantly in 2024.
Year-to-date, Intel shares have fallen about 35%, while Nvidia surged approximately 75%, Arm rose 34%, and AMD gained 7%.
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