Shares in chip maker Intel (NASDAQ:INTC) were hammered throughout 2022, with INTC stock staying on a downward trajectory during the first two months of this year.

As I have discussed previously, this was due to two factors. First, the company’s poor financial performance. Second, related to some extent to the first factor, was rising concerns about softening semiconductor demand due to the tech sector’s slowdown.

Alongside these factors, there had been growing pessimism that Intel’s ambitious turnaround plan, which entailed pivoting towards becoming a contract manufacturer for “fabless” chip makers primarily, would be successful.

Flash forward to now, and sentiment for INTC has improved. As a result, the stock, after hitting multi-year lows during February, has bounced back from the mid-$20s to the low-$30s per share.

But if you believe this is the start of a smooth recovery, think otherwise. Chances are it’ll remain a bumpy ride.

INTC Stock: Less Bearish, Not Bullish

It’s unsurprising that, after a horrendous start to this year, Intel shares have started to perform much more strongly. The improved sentiment did not emerge out of thin air. Rather, it largely emerged in response to what the chip giant revealed at its March 30 data center and A.I. (DCAI) investor event.

At DCAI, the company announced that its 5th generation Xeon CPU chips (often called Emerald Rapids CPUs) is set to debut on schedule later this year. Intel also revealed that its power-efficient Sierra Forest chips would debut during the first half of 2024. Another much-awaited data center chip, code-named Clearwater Forest, would arrive by 2025.

Investors reacted positively to this news, as did one analyst. That is, a few days after DCAI, Bernstein analyst Stacy Rasgon upgraded INTC stock, raising his price target from $20 to $30 per share. However, saying Rasgon has become bullish on Intel may be an overstatement.

Instead, less bearish is a more accurate way to describe it. As for other analysts, the ones impressed with the takeaways from DCAI have nonetheless reiterated their respective prior ratings. While positive news, DCAI has not exactly changed the story just yet.

Near-Term Remains Up in the Air

In recent trading days, the boost provided by the positive reaction to the DCAI event has started to wane for INTC stock. This comes as analysts and market participants remain divided as to whether tech demand is stabilizing.

Some analysts, like Susquehanna’s Christopher Rolland, believe that the chipmakers like Intel focused more on end-user markets like PCs, have reached a cyclical bottom. Other analysts, like Citi’s Christopher Danely, continue to recommend caution when it comes to this chip stock. While acknowledging recent promising data about PC chip demand, Danely remains concerned about data center chip demand.

Left with mixed signals today, the near-term picture for Intel will become much clearer on April 27. That’s when the company next reports quarterly earnings. Along with the results themselves conveying whether demand trends are getting better or worse, guidance will help signal how soon the chip industry will get out of its current downturn.

Some investors may believe that Intel is poised to surprise pleasantly, given that forecasts for this quarter have already been walked back. However, given all the uneasiness still surrounding chip stocks, the market could take any negative from the report and use it as an excuse to sell.

So Too is the Long-Term

After the partial rebound, a poorly-received earnings report may result in INTC coughing back these recent gains later this month. Yet it’s not only the near-term that’s still up in the air. Long-term prospects remain highly uncertain with Intel as well.

It’s unclear whether the company’s spate of new chip launches in 2023, 2024 and 2025 will help it regain ground lost to rivals such as Advanced Micro Devices (NASDAQ:AMD).

Keep in mind, too, that Intel’s big bet on becoming a major chip fabricator could fail to deliver the intended result. Grabbing market share from leading fabricators like Taiwan Semiconductor (NYSE:TSM) could be easier said than done.

Even if you’re confident that the company will prevail against these challenges, bring its earnings back to prior levels, and reinstate its past high dividend, there’s likely plenty of time ahead to reenter a position in INTC stock before the comeback truly begins.

On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.