Intel Corporation (INTC) Faces $5 Billion Investment Proposal from Apollo Amid Struggles, Northland Sees US Military Support as Key to Future - InvestingChannel

Intel Corporation (INTC) Faces $5 Billion Investment Proposal from Apollo Amid Struggles, Northland Sees US Military Support as Key to Future

We recently compiled a list of the 20 Trending AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where Intel Corporation (NASDAQ:INTC) stands against the other AI stocks.

The latest developments in the AI industry from a business perspective highlight a growing momentum, driven by significant investments, innovative product launches, and both regulatory and market challenges. One notable development is the rise of Safe Superintelligence, a company founded by previous OpenAI bigwig Ilya Sutskever, which recently secured $1 billion in funding to advance AI systems with a focus on safety. This significant capital raise from major venture capital firms like Andreessen Horowitz and Sequoia Capital underscores the growing concerns around AI safety, as companies work to ensure that AI technologies are both powerful and aligned with human values. Similarly, the market selloff of Wall Street’s favorite GPU maker following a stellar earnings report, resulting in a market value loss of close to $280 billion, reflects investor anxieties over the sustainability of AI growth, compounded by concerns over regulatory scrutiny.

Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.

Another major business development that investors should keep an eye on is the purchase of  AirTrunk by investment firm Blackstone for over $16 billion. AirTrunk, a data center operator, significantly boosts the position of the investment titan in the rapidly expanding AI infrastructure market. Data centers are expected to require up to $2 trillion in investment globally over the next five years to meet the demands of AI technologies, and the AirTrunk acquisition signals strong confidence in this growth by top investment managers. Data center expansions are critical as companies like OpenAI and Anthropic roll out enterprise-grade AI services, which demand immense computing power. For example, Anthropic recently launched Claude Enterprise, a robust AI chatbot, that caters to organizations that need advanced features like larger context windows and GitHub integration, aiming to streamline business operations through AI.

Read more about these developments by accessing 10 Buzzing AI Stocks According to Goldman Sachs and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.

Our Methodology

For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A technician soldering 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. Latest reports, published by Bloomberg, claim that investment firm Apollo Global Management has offered to invest billions of dollars into troubled chipmaker Intel. The investment, worth up to $5 billion, is under consideration by Intel. The investment proposal comes amid reports of a QUALCOMM offer to buy Intel, which analysts have dismissed as regulatory improbable. Intel is considering the sale of parts of the business as it struggles to improve financials. Some of the options on the table include splitting the foundry business and possibly scrapping factory projects.

Northland has an Outperform rating on Intel Corporation (NASDAQ:INTC) stock with a price target of $42. In a recent investor note on the chipmaker, the investment advisory underlined that the US military had no alternative to TSM other than Intel for advanced logic chips and noted that the Department of Defense required that the chips they use be manufactured on US soil. For these reasons, the advisory claimed, the Daddy War Buck would continue to provide funding to the chipmaker, even though Intel needed to be split into pieces to justify the present price target.

Some investors are saying that Intel Corporation (NASDAQ:INTC) is a deep value stock while it trades at less than book value, but is it? The stock is currently trading at ~ 13 times its projected operating cash flow, a 43% discount to its sector. Going by Intel’s executions in the past which includes missed deals with a leading smartphone giant, delayed plants for advanced chips, losing share aggressively to competitors, it might not be a good idea to expect the company to suddenly become a cash cow, while it’s still struggling to catch up to competitors.

Overall INTC ranks 17th on our list of the trending AI stocks on latest analyst ratings and news. While we acknowledge the potential of INTC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than INTC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

 

Disclosure: None. This article is originally published at Insider Monkey.

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