Latest Developments:
Intel (INTC) continues to disappoint investors, with Q2 2024 results missing expectations. Revenue came in at $12.93 billion, and EPS was $0.10, marking the third consecutive earnings miss. Gross margins have shrunk, and 3Q24 guidance indicates a decline in revenue, with expected gross margins falling further. In response, Intel is implementing liquidity-preserving measures, including layoffs, reducing capital expenditures, and suspending dividends. Geopolitical tensions, particularly with China, further compound Intel's challenges, with the company facing significant revenue losses from its largest market.

Investment Case:
Despite ambitious plans for its foundry business, Intel’s forecast of $15 billion in annual revenue by 2030 is unlikely to offset significant losses in other segments. Geopolitical risks and a failure to capitalize on the AI boom add to the company's troubles. Intel's declining market share and liquidity concerns suggest that its turnaround plan will not be enough to restore investor confidence in the near term.

Company's Valuation:
Given the weak outlook and high risk, Intel’s valuation appears overinflated. With a price range between $10.99 and $19.60, there is minimal upside from the current price of $20.11. Investors should avoid Intel until there is clearer evidence of a successful turnaround.

Disclaimer: The above is an excerpt on a report written by our close associate, Selendis Research. Check out the full report here on Seeking Alpha. All information provided is intended solely for general informational purposes. Seven Insights does not take into account individual financial goals or situations and does not provide personalized investment advice. Seven Insights is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank.