Intel's (NASDAQ: INTC) stock price has been seeing some big swings over the last year as investors weighed the benefit of emerging opportunities against various geopolitical pressures and other risk factors. One analyst firm weighed those conflicting actors and came away with the assumption that the semiconductor giant's share price is heading significantly higher in the near term.
In a research note published on April 1, UBS' analysts maintained a neutral rating on Intel but raised its price target on the stock from $46 per share to $50 per share. With the stock currently trading at roughly $44 per share, that would imply a potential upside of nearly 14% over the next 12 months or so.
Intel has some promising opportunities ahead
Intel's core business of designing central processing units (CPUs) for computers and servers has been showing some signs of weakness in recent years. The company has been losing ground to Advanced Micro Devices in PCs and servers, and the business also faces competitive pressures from Arm Holdings. But Intel also has some intriguing growth opportunities on the horizon.
Intel is making a much bigger push into the chip fabrication market and intends to generate much more business from manufacturing chips designed by other companies. UBS's analysts see significant promise with the initiative, but they remain somewhat cautious about Intel stock due to concerns that the chip company is behind when it comes to artificial intelligence (AI) and other key growth segments.
Ultimately, I think Intel stock stands out as a worthwhile buy right now. While it's somewhat difficult to get a read on the company's positioning in the AI race at the moment, the chip giant's opportunities as a fabrication services provider still appear to be underappreciated. For long-term investors, I think building a position in Intel at today's prices would be a smart move.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices. 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 May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
