Down 35% In 2024, Are Analysts Right About Intel Stock (NASDAQ: INTC)?

As other big names in the AI and semiconductor sector have been soaring, one notable absentee from many lists has been Intel Corporation. With the stock down more than 35% YTD, the consensus from analysts for an upside of 26% from here may not seem so fanciful, but what is going to shift the tide of sentiment?

One possible accelerant for the Intel share price (NASDAQ: INTC) both today and yesterday is a potential European expansion, after reports emerged about the tech giant's negotiations with private equity firm Apollo Global Management.

The talks of an $11 billion deal, are purported to assist Intel's efforts to establish a new chip factory in Ireland. As markets digest the potential of this significant capital infusion, the implications for Intel's operations and market position are coming into sharper view.

Intel's decision to deepen its chipmaking footprint in Europe comes at a time when there is a global surge in demand for semiconductors, primarily due to the increasing needs in the field of artificial intelligence (AI) technology. This demand is only expected to grow as advancements in AI continue to broaden the applications and market for these crucial components.

Furthermore, the strategic move to expand in Ireland aligns well with the European Commission's funding guidelines, which could provide Intel with additional financial benefits aside from the Apollo Global Management support. The proposal is timely, as it also addresses the geopolitical trade tensions that currently loom over the tech industry. With the U.S. and other countries tightening trade restrictions with China, Intel could well find itself in a position to capture a larger market share as companies around the world look for alternative suppliers outside of China.

Investors have responded favourably to the news of the upcoming deal, which is expected to reach closure in the coming weeks. On Monday morning, INTC's stock reflected the positive mood with a 3.9% jump, alongside an exchange of over 15.7 million shares. In today's session, Intel is trading green to the tune of 1.33%, continuing the positive trend.

Notably, it seems that Intel is planning not just a single facility in Ireland as part of this European expansion, but also intends to add additional factories in France. These developments indicate a broad strategy to not just compete with Chinese or US rivals, but to become a preeminent chipmaker in Europe. This large-scale expansion could prove pivotal in seizing market opportunities and mitigating the risks associated with the current supply chain uncertainties.