Shares of Intel Corporation (INTC) are up nearly 4% through Monday morning so far after news broke of the company’s $3.5 billion grant awarded under the “Secure Enclave” program by the US Department of Defense.

These funds will be used to produce advanced semiconductors which will then be used for our country’s strategic defense needs. Getting federal funding like this from the DOD is a fairly rare occurrence, and it couldn’t have come at a better time for Intel.

In fact, some experts have gone as far as to say that this could stabilize the company’s recently worsening sentiment. Intel has been hit with one negative development after another over the past few weeks.

For example, the company is working hard to secure an additional source of funding under the CHIPS Act, another means of federal support. It could land the chipmaker as much as $8.5 billion in additional grants and another $11 billion in financing.

The only problem is the company must establish a more significant manufacturing process here in the United States to qualify. At this time it appears Intel is either unwilling or unable to fulfill this requirement, and thus, negotiations have begun to fizzle out.

INTC has fallen nearly 60% so far through 2024 as the company’s future looks uncertain. However, a revival strategy will soon be presented at an upcoming board meeting addressing all relevant challenges.

The plan includes drastic measures like selling off its majority stake in Altera, ceasing construction of its $30 billion facility in Germany, and potentially even selling off its Foundry division to free up capital.

Other measures to improve profitability include dividend cuts, workforce downsizing by as much as 13.6%, and tightening up its 2025 CapEx plans by 17%.

While INTC has gained more than 6% in the past week, the company has a deep hole to climb out of. Is it officially time to cut losses as a shareholder? We’ve taken a look through the VectorVest stock software and found a few reasons to consider it.

INTC Has Fair Upside Potential, But Poor Safety and Very Poor Timing Make the Stock a SELL

VectorVest is a proprietary stock rating system that distills complex technical and fundamental data into 3 simple ratings, helping you make more clear, calculated investment decisions with less time and stress.

These ratings are relative value (RV), relative safety (RS), and relative timing (RT). Each sits on a scale of 0.00-2.00 with 1.00 being the average, making for quick and easy interpretation. 

Better yet, you’re given a buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. Here’s what we found for INTC:

  • Fair Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year price projection), AAA corporate bond rates, and risk - making it a far superior indicator than the typical comparison of price to value alone. INTC has a fair RV rating of 1.01, right at the average. The stock is slightly undervalued with a current value of $23.34/share.
  • Poor Safety: The RS rating is a risk indicator. It’s computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 0.79 is poor for INTC.
  • Very Poor Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. As you can infer from the stock’s performance so far this year, INTC has very poor timing with an RT rating of 0.40.

The overall VST rating of 0.75 is poor for INTC and results in a SELL warning for all current investors. If you’re holding shares of INTC right now, take a moment to review this free stock analysis for even more insights and protect your portfolio!

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VectorVest advocates buying safe, undervalued stocks, rising in price. INTC has landed a grant from the US Department of Defense, providing a source of capital amidst a myriad of struggles. The stock itself has fair upside potential, but poor safety and very poor timing are holding it back.

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