Intel's turnaround challenges lead KeyBanc to cut chipmaker's rating
4kodiak/iStock Unreleased via Getty Images


While Intel (NASDAQ:INTC) was celebrating the hiring of Dave Zinsner as chief financial officer away from his job at Micron Technology (NASDAQ:MU), KeyBanc analyst John Vinh cut his rating on the chipmaking giant on the grounds that any noticeable company turnaround faces several challenges ahead.

Vinh took down his rating on Intel (INTC) to sector perform, or the equivalent of neutral, saying that while the company's management "is doing everything a bull would want," there are few catalysts on the horizon that would generate enthusiasm on Wall Street.
Among the reasons Vinh gave for his downgrade were Intel (INTC) delaying the release of its next Xeon server processor, called Sapphire Rapids, and signs that the company's plan to build a new chip foundry "is going to take longer than we had originally expected."
Vinh also said that Intel (INTC) still appears to be trailing rivals such as Advanced Micro Devices (NASDAQ:AMD) and Amazon Web Services (NASDAQ:AMZN) in certain areas of high-end computing processors.
"Given how quickly we expect AMD to gain share in cloud [computing] this year, and how aggressively AWS plans to ramp its Arm-based Graviton processors, we believe these headwinds in cloud will be difficult to overcome," Vinh said.
On Monday, Intel (INTC) poached Zinsner away from Micron (MU), with several analysts calling the move a big win for the chipmaker.