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Intel Corporation (INTC), International Business Machines Corp. (IBM): Will an Analyst Upgrade Cure What Ails This Tech Stock?

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Technology stocks have suffered in recent weeks, particularly those whose fortunes are reliant on the personal computer. The PC is under attack, bemoaned by its critics as a relic of technology, the death of which is sure to bring down a host of large technology companies.

Intel Corporation (NASDAQ:INTC)

This pervasive fear has led to significantly discounted valuations on many large-cap technology stocks. One of which is Intel Corporation (NASDAQ:INTC), which has lagged far behind the market this year. Fortunately for investors, Intel got a shot in the arm recently in the form of an analyst upgrade. Is the analyst bullishness the catalyst Intel needs? Or is this just another case of blind analyst optimism?

Investors will take any catalyst they can get

Intel Corporation (NASDAQ:INTC) investors were likely relieved to find that an analyst with Piper Jaffray had upgraded the semiconductor giant to “neutral,” from “underweight,” and had also increased his price target to $22 per share, a 10% improvement from previous levels.

The analyst’s optimism stems from Intel Corporation (NASDAQ:INTC)’s effective cost-cutting measures, as well as the promise of the company’s Atom chips.

Moreover, the analyst is predicting a 2014 product refresh cycle for notebooks, particularly at the enterprise level, which would be great news for Intel and its chips.

On a day in which the overall market fell into the red, Intel Corporation (NASDAQ:INTC) rose nearly 2%. This stands in marked contrast to what we’ve seen over the past few months, which was consistent Intel underperformance, even on days in which the market rallied.

Intel Corporation (NASDAQ:INTC) has been severely beaten down over the past several months, particularly when compared to the overall market. Whereas the S&P 500 Index has racked up double-digit gains to start 2013, Intel is up much less than that, only about 6% year to date.

It’s not hard to see why Intel’s shares are suffering. Intel has posted several poor quarters in recent history, which have only served to fan the flames of PC-related fears. Intel Corporation (NASDAQ:INTC)’s dour results reflect both a slowdown in consumer and business spending on technology, as well as the continued belief that tablets and mobile devices will keep snatching market share away from traditional laptops and notebooks.

Not the only suffering tech stock around

Intel isn’t alone when it comes to large-cap technology giants lagging behind the broader market. Even technology companies that aren’t at all reliant on the personal computer are seeing weakness in both their business conditions and their stock prices.

Tech juggernauts International Business Machines Corp. (NYSE:IBM) and Oracle Corporation (NYSE:ORCL) are both down approximately 5% year to date, which pales in comparison to the roughly 15% gains for the S&P 500 Index.

Again, we see a pattern of technology stocks that were once counted on for strong growth, simply falling short.

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