Intel Stock Encounters A Death Cross As Chipmaker Struggles To Turn Around

Intel Corp INTC endured its worst month in over 20 years, with shares plunging 31% in April. So far this year, the stock is down about 40%, and is trading 13.50% lower since it reported Q1 earnings on April 25.

The chipmaker’s struggles continue as it grapples with executing a much-needed turnaround.

Also Read: Intel ‘Still A Work In Progress’ As ‘Turnaround Efforts Take Root,’ Analysts Say After Q1 Disappointment

Weak Forecasts Amid A Difficult Turnaround

Much of Intel’s recent selloff followed a disappointing earnings report, where the company provided a weak forecast. This indicates that Intel’s efforts to turn its business around will require more time and investment.

Additionally, in March, Intel’s factory operations faced challenges, adding to investor concerns.

Analysts Remain Cautious, See Uncertainty

Analysts remain cautious about Intel’s near-term prospects. The consensus analyst rating for Intel’s stock stands at Neutral with a price target of $37.52.

Stifel noted that while 2024 should mark a bottom for many aspects of the business, the pace of recovery remains uncertain. Despite this, there’s optimism about the company’s future. Revenue is expected to rise 4.2% in 2024, followed by a more robust growth rate exceeding 12% in the following year, which would be its fastest pace since 2018.

Death Cross Formation Solidifies Bearish Trend

Technically, Intel’s stock is in a bearish phase and is experiencing selling pressure.

Chart: Benzinga Pro

It has fallen below key moving averages, including the 5, 20, 50, and 200-day simple moving averages (SMAs).

Chart: Benzinga Pro

The 50-day moving average has crossed below the 200-day moving average, signaling a Death Cross and reinforcing the market’s bearish sentiment.

The death cross suggests that the security’s average price in the short term is below its average price in the long term, which can be interpreted as a signal of a downtrend in the security’s price. Traders and analysts often see the death cross as a bearish signal.

Intel’s stock faces significant headwinds as it struggles to execute its turnaround plan. While analysts see potential for improvement in the future, the technical setup suggests a bearish outlook in the near term.

Investors should carefully monitor developments and consider their risk tolerance before making any investment decisions related to Intel stock.

Read Next: Intel Reports Weak Sales, Joins Boyd Gaming, Atlassian And Other Big Stocks Moving Lower In Friday’s Pre-Market Session

Photo: Shutterstock