Intel (NASDAQ:INTC) and IBM (New York Stock Exchange:IBM) are two old-school technology plays that survived the rise and fall of the dot-com bust nearly a quarter of a century ago. Arguably, Intel and IBM were the stars of their time, and although other tech giants like the Magnificent Seven have taken their place, these two of his old-school tech plays are poised to take the world by storm. I still feel it’s worth watching again. Artificial intelligence (AI) ball and run with it.
So check out TipRanks’ comparison tool to see where Wall Street analysts stand on two AI-savvy legacy companies heading into March 2024. And, perhaps more importantly, how much profit each company can make when betting on the next company. Is the rise of generative AI a trend that will become more impressive (and frightening) over time?
Admittedly, it’s hard to believe that this is basically the worst AI ever. In this uncertain and tech-savvy future, the next “dinosaurs” of the tech scene may be able to use AI as a lever for their growth and return to the spotlight.
Intel (NASDAQ:INTC)
Intel was the semiconductor frontrunner during the heyday of CPUs. Remember Intel’s ads and “Intel Inside” stickers? The best PCs needed to have this feature to be considered close to the best. Now, with a slew of new competitors swooping in, Intel is losing its edge. To add insult to injury, various large tech companies have chosen to build their own systems-on-chips (SoCs).
With the rise of accelerated computing and the advent of the generative AI era, I think Intel is still an underdog with no chance of winning. CEO Pat Gelsinger isn’t running the show with a plan to bring Intel back to the forefront. Given its modest valuation compared to its peers, I’m not opposed to betting on Intel stock even if it underperforms in key categories (in fact, I’m bullish).
As we gravitate away from PCs and toward so-called “AI PCs” (as Intel likes to call them), the company actually stands to win back a lot of users. In fact, AI capabilities are at the heart of the AI PC generation, and with its Falcon Shores chips (scheduled for release next year), Intel hopes to close the gap with some rivals in the AI chip scene.
Intel may be a little behind the times, but I believe they have what it takes to thrive in the age of AI-enabled PCs. The company is as ambitious as ever and wants to bring the “best CPU and best GPU” to the market.
As an investor, I don’t have very high expectations (given Intel’s very strong rivals, I would only be in for a big disappointment), but if Falcon Shores can keep up, Intel has room to profit. I believe that. Companies continue to use AI chips to back up their trucks. AI is a deep technology, and Intel stands out as an underappreciated “pick and drop” play at the moment, as other investors overlook its plans in favor of better-performing competitors. That’s for sure.
Only time will tell how Falcon Shores will grow in 2025, but the year is sure to be filled with significant advances in AI. In any case, the five-year PEG ratio is 0.53, which is far below the semiconductor industry average (3.3), making the stock look cheap.
In the meantime, expect Intel to continue to invest heavily in its factory facilities. Intel is reportedly seeking $2 billion to build a chip factory in Ireland, a sign that Intel is serious about catching up.
What is the target price for INTC stock?
Analysts say INTC stock is a hold, with 8 buys, 24 holds, and 4 sells assigned over the past three months. INTC’s average price target of $46.69 implies an upside potential of 4.9%.
IBM (NYSE:IBM)
IBM stock is attractive again after hitting multi-year highs on the back of solid quarterly revenue growth (up 4%) and some impressive free cash flow prospects (a whopping $12 billion in 2024) It looks like. The star of the show was (you guessed it) AI and its potential to bring legacy companies into the modern era.
While IBM stock isn’t the hottest AI stock on the market right now (far from it, in fact), it’s a tough bet against an old-school tech stock because it touts some of its AI strengths. All things considered, I remain bullish on this name.
It’s not just the growth in AI that makes me excited about this company. IBM aims to build generative AI products that are responsible and even trustworthy. Without a doubt, your data and privacy are at risk whenever you use chatbots. Also, don’t forget about chatbot “hallucinations,” where chatbots can unintentionally provide incorrect information.
IBM’s focus on ‘responsible AI’ and interesting management team focused on ethics puts the company on the verge of regaining its glory after years of standing in the shadow of bigger innovators ahead of it. So I see it as a potential AI underdog that could shock us all. that. IBM is back. Maybe it’s time to give the company the benefit of the doubt.
What is the target price for IBM stock?
Analysts say IBM stock is a hold, with five buy, six hold, and two sell assignments over the past three months. IBM’s average price target of $188.54 implies an upside potential of 2.8%.
Take-out
Traditional tech giants are using AI to innovate and it could be the “golden ticket” to greater heights and relevance to a new generation. Of the two, analysts expect Inter to make even more money in the year ahead. I tend to agree. Intel stock looks like a better bet given its clear path forward and a potentially impactful new chip (Falcon Shores) due in 2025.
disclosure
