Recent reports could have posed greater challenges for Intel (NASDAQ: INTC), particularly as indications emerged that the compatibility of Intel processors with Apple (AAPL) Mac computers is nearing its conclusion. Surprisingly, Intel’s investors reacted positively, driving the stock up by over 8% during Tuesday’s afternoon trading session.
The reports revealed that MacOS Tahoe will be the final version to support Intel-based Macs, which includes older models like the MacBook Pro, iMac, and Mac Pro. Users of these devices can still access updates once Tahoe is released. However, they will miss out on the new Apple Intelligence feature, which will only be available on Apple’s own processors.
While the loss of Apple as a customer for certain desktop hardware was anticipated, it’s worth noting that Apple has spent the last five years transitioning its lineup to in-house processors. Despite this shift, Apple had previously assured users that it would continue to support Intel processors “…for years to come.” Now, that commitment appears to be reaching its conclusion.
Despite the news, what fueled Intel’s significant stock increase? Alongside the earlier concerns, there was positive news surrounding the chip sector linked to potential easing of trade restrictions with China, which created a favorable “halo effect” for Intel. Reports suggested that “…hopes that the talks between the U.S. and China will result in looser export restrictions” contributed significantly to the day’s gains.
Additionally, Intel is set to gain from initiatives by the Department of Defense, which will likely provide “…operational technology-specific zero trust guidance,” as stated by Intel’s federal chief technology officer. This initiative aims to enhance cybersecurity measures for military systems, including weapons systems and sensor networks, among others.
As for Wall Street’s perspective, analysts maintain a Hold consensus rating for INTC stock, which is derived from one Buy, 26 Holds, and four Sells recorded over the past three months. Following a nearly 34% decline in share price over the last year, the average target price for INTC is set at $21.29 per share, suggesting a potential downside risk of about 3.88%.