When a stock pundit increases their price target on a company’s shares, they tend to rise at least modestly in price. Unfortunately for stockholders of storied tech hardware company Intel (NASDAQ: INTC), the opposite occurred on Thursday — their company lost 0.4% of its market value following the move. That, however, more or less matched the drop of the S&P 500 index that trading session.
It was a raise-but-hold for Intel
The prognosticator behind the Intel raise was Bernstein‘s Stacy Rasgon, and the hike was substantial. He added $6 to his price target on the stock for a new level of $42. This does not, however, make him bullish on the veteran tech company’s prospects; he maintained his market perform (hold, in other words) recommendation.
It wasn’t immediately apparent why Rasgon bulked up his target price, but it comes early in what is already shaping up to be an eventful year for Intel. On Wednesday, the company and investment firm DigitalBridge Group announced they have created a new specialized company focused on artificial intelligence (AI) solutions for businesses.
In Intel’s words that company, Articul8 AI, will offer business clients “a full-stack, vertically optimized, and secure generative artificial intelligence (GenAI) software platform” that will feature “AI capabilities that keep customer data, training, and inference within the enterprise security perimeter. “
The latest company to plunge deeper into AI
Intel did not reveal much financial or strategic detail about Articul8, so perhaps that’s why it didn’t provide any lift to the company’s stock. The establishment of this business is a development well worth watching, though, as tech titans are already waist-deep in the AI segment, and Intel is expected to at least be competitive in the field.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
Why Intel Stock Slumped Today Despite an Analyst’s Price Target Bump was originally published by The Motley Fool