Intel Corp. (NASDAQ: INTC), which has been a leader in the market for years, is reducing its prices further after China delivered what it promised by imposing retaliatory duties on American products.
All US goods will be subject to a tariff of 34% in Beijing starting April 10.
Intel’s stock has been falling primarily due to the fact that the chipmaker is heavily exposed to China. This could make it difficult for Lip-Bu, Tan, who was recently named chief executive of the company, to achieve the turnaround investors expect.
INTC’s shares have fallen by well over 20 percent from their high for the year.
Intel’s revenue from China
Investors welcomed Tan’s March 12 appointment as Intel’s chief executive. He previously worked at Cadence Design Systems and therefore knows the business inside out.
In the meantime, however, China’s retaliatory trade tariffs could reduce INTC’s appeal to investors.
China will generate more than $29% of the company’s total revenue in 2024.
Intel could suffer a significant loss of income in the face of the new tariffs, as it is already fighting to protect its market share against AMD and Nvidia.
Samsung could be a competitor for its clients, as tariffs in China make their products more costly.
What is the revenue that Qualcomm receives from China?
Qualcomm Inc. (NASDAQ: QCOM) is another US chipmaker who could be hit hard by China’s tariffs in retaliation.
Beijing is the biggest source of revenue for this multinational, based in San Diego, California.
QCOM’s revenue in China grew by more than 43 percent last year. Many of China’s smartphone makers use Qualcomm chips.
QCOM’s products could be more expensive in response to President Xi retaliatory duties on American goods. This may push OEMs towards alternatives such as Huawei’s Kirin processor series.
The stock of Qualcomm is down by more than 20 percent from its high for the year to date in early February.
What’s the street view of INTC and QCOM?
Analysts continue to expect Intel to have a significant rise in the stock price for the rest of this year, despite new tariffs by China.
The average Street price target for the semiconductor stocks is currently more than $25. This indicates a potential gain of almost 25% over current levels.
A healthy dividend yield of 2.23%, which is tied to Intel’s shares as of this writing could explain their positive view.
Wall Street is even more optimistic about Qualcomm’s stock heading into Friday.
The analysts’ “overweight rating” on QCOM, coupled with the average target price of $200, translates into a roughly 45% increase from this point.
The post China’s retaliatory duties add Intel woes, QCOM will also be hit by the tariffs may change as new information becomes available.
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