What happened
Shares of Intel (INTC 4.09%) were moving higher last month after the chipmaker benefited from some positive analyst notes and signs that the chip market and demand for PCs had bottomed, and got a jolt after investors responded positively to Micron's earnings report at the end of the month.
According to data from S&P Global Market Intelligence, the stock gained 31% in March, trending with broad gains in the semiconductor sector. As you can see from the chart below, the stock jumped in the middle of the month and again at the end of March.
So what
Intel started off March with a bullish note from Raymond James, which resumed coverage with an outperform rating and a $30 price target, saying that although it expected continued market share losses, the bar was already low enough following an earlier slide in the stock.
The stock then surged in the third week of the month on several news items.
First, tech stocks jumped after the collapse of Silicon Valley Bank as the federal government made clear it would insure all depositors.
Additionally, a well-respected semiconductor analyst, Christopher Rolland from Susquehanna, said he believed that the consumer electronics sector had likely bottomed already, favoring PC suppliers like Intel.
Intel also got an upgrade from Susquehanna, which raised its rating from negative to neutral as it sees headwinds easing on the company, and it believes the chip sector is hitting a bottom in areas related to consumer, PC, and handsets. It also said it was no longer losing market share to Advanced Micro Devices.
The stock jumped 6% on March 16, the day the upgrade came out, though it gave back those gains over subsequent sessions after the Federal Reserve raised interest rates by another 25 basis points, tightening pressure on Intel, which has a heavy debt burden and is expected to report a loss in the first quarter.
Finally, the stock surged after the last three days of the month after Micron jumped on its quarterly earnings report.
Though the memory chip maker reported a sharp decline in sales and a wide loss, the stock still rose as investors bet that the worst was behind Micron, which was good news for Intel.
NASDAQ: INTC
Key Data Points
Now what
Intel still faces a challenging year ahead, but the stock may have fallen far enough to give it some upside if the PC cycle has, in fact, bottomed.
However, over the longer term, the company will have to defend its market share from AMD and execute its extensive manufacturing plan, which won't be easy for a company that has a long track record of underperforming.
