Shares of Intel (NASDAQ:INTC) took a hit as the company offered projections on the sales of its Gaudi 3 chip, causing disappointment in the market. The projections fell short, especially when compared to the impressive performance of rival chip stock Nvidia (NASDAQ:NVDA).
Intel’s Gaudi 3 chip was expected to bring in approximately $500 million in sales this year, which initially seemed positive. However, when juxtaposed with Nvidia’s earnings of $18.4 billion in just one quarter in the same market segment, Intel’s numbers pale in comparison. Nvidia’s potential annual earnings of around $72 billion far exceed Intel’s projected $500 million from the Gaudi 3 chip.
Despite the underwhelming performance of the Gaudi 3 chip, Intel has other products in the pipeline that could potentially boost its standing in the market. Reports suggest that the Lunar Lake lineup, particularly the Battlemage GPU, shows promise as a powerful and efficient chip suitable for handheld gaming applications. However, its capability to handle desktop gaming loads remains uncertain.
Following Intel’s latest earnings report, which received a lukewarm response from investors due to uninspiring guidance, analysts on Wall Street have a consensus Hold rating on INTC stock. This rating is based on four Buy recommendations, 23 Holds, and four Sells in the past three months. Despite a 3.15% increase in share price over the past year, the average price target of $39.96 per share suggests a potential upside of 29.15%.
Investors considering Intel for passive income should weigh their options carefully. TipRanks’ Smart Dividend Stock Portfolio does not currently include Intel, focusing instead on companies selected for their potential to provide substantial passive income over the long term.
