{"id":6099,"date":"2023-10-27T19:26:00","date_gmt":"2023-10-27T19:26:00","guid":{"rendered":"https:\/\/infundpros.com\/investment\/intels-stock-powers-toward-best-day-in-a-year-heres-why-skeptics-still-have-concerns\/"},"modified":"2023-10-27T19:26:01","modified_gmt":"2023-10-27T19:26:01","slug":"intels-stock-powers-toward-best-day-in-a-year-heres-why-skeptics-still-have-concerns","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6099","title":{"rendered":"Intel\u2019s stock powers toward best day in a year. Here\u2019s why skeptics still have concerns."},"content":{"rendered":"
\n

Intel Corp.\u2019s latest earnings are further proof to at least one analyst that the company\u2019s most painful days are in the past.<\/p>\n

But as Intel shares
\n INTC,
\n +9.46%<\/bg-quote>
\n were shooting 10.3% higher in Friday trading and heading toward their best single-day performance in a year, Wall Street analysts didn\u2019t necessarily seem convinced that the chip maker has a rosy future ahead.<\/p>\n

\n

\u201cOverall the company does appear to have turned the corner on the worst of it, and (perhaps) a PC-dominated narrative might be enough to carry it for the moment,\u201d Bernstein analyst Stacy Rasgon said in a note to clients. \u201cWe admit to warming (slightly) to the story though there remains enough wood to chop here to keep us sidelined for now.\u201d<\/p>\n

Intel late Thursday topped expectations with its latest results, driven by a big beat in the company\u2019s client segment, which represents its personal-computer business. The company also offered an upbeat outlook. <\/p>\n

Rasgon, though, still has concerns about data-center trends, noting that performance there \u201ccontinues to suffer from significant headwinds on both revenue and profitability (even with supposedly record pricing
and improving Sapphire mix).\u201d<\/p>\n

In his view, it\u2019s \u201clikely that share losses have probably resumed,\u201d and Intel\u2019s artificial-intelligence narrative \u201cstill seems marginal.\u201d Plus, he noted, the company is burning cash.<\/p>\n

He reiterated a market-perform rating on the stock, though he lifted his target price to $36 from $34.<\/p>\n

Baird analyst Tristan Gerra offered a similar perspective. <\/p>\n

\u201cIntel is well entrenched in a revenue and gross margin recovery, post a [first-quarter] trough,\u201d Gerra wrote. \u201cHowever, despite strong execution recently Intel continues to face formidable challenges including generating sufficient revenue growth to fund future node migrations notably absent a competitive GPU architecture, initial inroads for ARM-based architectures, and possible challenges ramping new node production in much higher volumes than what Intel will ship with Intel 4.\u201d<\/p>\n

He rates the stock at neutral with a $40 target.<\/p>\n

At least one former bear has changed his tune on Intel shares in the wake of the latest earnings, although he took a measured view as well. <\/p>\n

\u201cWhile we still have concerns over the overall [data-center] recovery, we upgrade Intel to Hold as we expect significant earnings revisions from better execution and improving PC outlook to lead to a re-rating,\u201d HSBC analyst Frank Lee wrote, as he abandoned his prior \u201creduce\u201d stance.<\/p>\n

Chris Caso of Wolfe Research, meanwhile, stuck with his bearish call. <\/p>\n

\u201cFor [calendar 2024], we expect client to normalize and data-center to lag (with continued share loss) \u2014 but the biggest [calendar 2024] question is on [gross margins], and it was puzzling that the company declined to clarify margin commentary they discussed earlier this quarter,\u201d he wrote. <\/p>\n

Caso\u2019s underperform rating \u201ccontinues to be underpinned by our view that [Intel] burns cash and experiences modest margin improvement next year, in contrast to our expectations for a stronger recovery elsewhere in semis,\u201d he wrote, while keeping a $31 target price. <\/p>\n

Raymond James analyst Srini Pajjuri was far more upbeat.<\/p>\n

\u201cWhile Intel won\u2019t likely get much credit for AI in the short term, green shoots are emerging with the company\u2019s Gaudi 2 accelerator pipeline doubling in the past 90 days,\u201d he noted. <\/p>\n

In Pajjuri\u2019s view, sentiment will \u201ccontinue to improve on moderating share losses, improving execution, margin recovery, Foundry progress, and emerging AI opportunity.\u201d<\/p>\n

He maintained an outperform rating while boosting his price target to $42 from $40 in a note to clients titled: \u201cTurnaround Story Getting into a Higher Gear.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Intel Corp.\u2019s latest earnings are further proof to at least one analyst that the company\u2019s most painful days are in the past….<\/p>\n","protected":false},"author":1,"featured_media":6100,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":{"0":"post-6099","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investment"},"yoast_head":"\nIntel\u2019s stock powers toward best day in a year. Here\u2019s why skeptics still have concerns. | inFundPros<\/title>\n<meta name=\"description\" content=\"Intel Corp.\u2019s latest earnings are further proof to at least one analyst that the company\u2019s most painful days are in the past. 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