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

Intel’s Foundry Business Incurs $7 Billion Operating Loss, But Company Vows to Reach Break-Even Margins by 2030 with $100 Billion Investment in U.S. Chip Factories

Intel, the chip-making giant, has reported that its Foundry business incurred an operating loss of $7 billion in 2023, compared to $5.2 billion in the previous year. However, the company is determined to achieve break-even operating margins by 2030. Despite the setback, Intel anticipates reaching 40% non-GAAP gross margins and 30% non-GAAP operating margins within the next seven years.

To support its turnaround efforts, Intel plans to invest $100 billion in constructing and expanding chip factories across four U.S. states. This move is essential for the company to attract clients and showcase its manufacturing capabilities to them.

On Wall Street, analysts have a consensus Hold 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 for INTC stock stands at $46.60 per share, indicating a 6.05% upside potential.

In summary, Intel’s Foundry business faced an operating loss of $7 billion in 2023 compared to $5.2 billion in the previous year. However, Intel aims to achieve break-even operating margins by 2030 and expects its Foundry business to experience its highest operating losses in 2024 before reaching non-GAAP gross margins of 40% and non-GAAP operating margins of 30% within the next seven years. To support this turnaround effort, Intel plans to invest $100 billion in constructing and expanding chip factories across four U.S states while analysts have given a consensus Hold rating on Intel stock with an average price target of $46.6 per share indicating an upside potential of 6%.

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