Intel Takes a Page from Elon Musk’s Playbook with Drastic Price Cuts
Intel is taking a page out of Elon Musk’s book and cutting prices on its CPUs and GPUs. This strategy could help the company recover from its recent struggles and boost its stock price.
Intel is taking a page out of Elon Musk’s book and cutting prices on its CPUs and GPUs. This strategy could help the company recover from its recent struggles and boost its stock price.
Intel Takes a Page from Elon Musk’s Playbook with Drastic Price Cuts
Intel Corporation (INTC) may be taking a page out of Elon Musk’s playbook by opting for drastic price cuts on its CPU and GPU offerings. This strategy could directly contribute to the semiconductor chip company’s recovery and boost its top and bottom lines. Intel’s foundry ambitions seem to be accelerating as well, with three firms committing to six active negotiations and one custom design win.
The news of Intel’s potential price cuts has excited investors, and the stock price has responded positively. However, due to the increasing chances of a hard landing, investors may want to wait for a moderate pullback before jumping in. Intel’s previous support level could provide an improved upside potential.
Intel’s drastic price cuts on GPUs could make them more appealing to budget-conscious gamers, especially in the current high-inflationary environment. While waiting for a potential stock retracement, investors may want to consider Intel’s previous support level for an improved margin of safety.
Intel’s strategy of cutting prices across CPUs and discrete GPUs could yield improved market share. In the context of Intel’s record share gain in the discrete GPU market, this strategy could provide a significant tailwind, especially during the PC server refresh cycle.
Intel’s management’s promising revenue guidance and adjusted EPS suggest that demand destruction may be behind us. However, the stock’s valuation appears fair based on management’s adjusted EPS guidance for the first three quarters and the forward PE valuation.
Given the increasing chances of a hard landing, investors may want to wait for a moderate pullback before investing in Intel. Chasing the rally at current levels may not be prudent.