Intel rises as Bernstein reluctantly upgrades, citing potential for improvements
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Intel (NASDAQ:INTC) shares rose fractionally in premarket trading on Monday as investment firm Bernstein reluctantly upgraded the semiconductor giant.
"...[W]hile things still look bad, tactically we believe the medium-term set-up is, finally, improving a bit, as the company's issues are known, and numbers (for the first time in a while) may be low enough to stand," analyst Stacy Rasgon wrote in an investor note, pointing out the company has burned through billions in cash, lost market share and its stock has dropped nearly 50% since CEO Pat Gelsinger took over in 2021.
Rasgon moved his rating on Intel (INTC) shares to market perform from underperform and raised the per-share price target to $30 from $20.
Rasgon also noted the "massive" over shipping of CPUs over the past 18 months has now reversed and the industry is under-shipping by a record margin. And with the company's recent roadmap seen as "not getting worse" (which Rasgon conceded may be as good as it gets, given current sentiment), it looks as if the stock has finally stopped going down on bad news.
"We wouldn't want to own it, but can make the argument that downside could be more limited at least into the back half," Rasgon added.
Regarding AMD (NASDAQ:AMD), which has continued to take market share away from Intel (INTC), Rasgon said the January downgrade was "clearly wrong" from a stock perspective, given the sharp run since then, but the reasons are still happening, including weaker margins.
Rasgon also said he does not believe that AMD (AMD) is the "poor man's" Nvidia (NVDA) and would recommend taking profits at current levels. Rasgon rates AMD (AMD) market perform with a per-share price target of $80.
Seeking Alpha contributor The Value Pendulum said Intel's (INTC) recent investor event was a positive and should help the company reach $110B in revenue by 2027.
Analysts are universally cautious on Intel (INTC). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates INTC a HOLD.