Intel’s $7 billion Foundry loss, and its path to profitability: What you need to know

Operating Loss of $7 Billion Reported for Intel’s Foundry Business (NASDAQ:INTC)

Intel (NASDAQ:INTC) recently announced that its Foundry business had an operating loss of $7 billion in 2023, which is a significant increase from the previous year’s loss of $5.2 billion. Despite this, Intel remains committed to achieving break-even operating margins by 2030. The company anticipates that its Foundry business will face its largest operating losses in 2024. However, it expects to achieve non-GAAP gross margins of 40% and non-GAAP operating margins of 30% within the next seven years.

In order to drive its turnaround, Intel has ambitious plans to invest $100 billion in the construction and expansion of chip factories in four U.S. states. This strategic move is essential for attracting clients to its manufacturing capabilities and solidifying its position as a leading player in the semiconductor industry.

Analysts on Wall Street have a Hold consensus rating on Intel stock, with seven Buys, 24 Holds, and four Sells assigned in the past three months. Despite a 35% increase in its share price over the past year, the average price target of $46.60 per share suggests a 6.05% potential upside for investors looking to buy shares in this tech giant.

Overall, Intel’s recent announcement highlights both the challenges and opportunities facing the company as it works towards achieving profitability and maintaining its competitive edge in the semiconductor industry.

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