Intel could see headwinds from PC weakness, as Citi sees more bad data
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Intel (NASDAQ:INTC) may start to experience some headwinds as PC shipments continue to come in below investment firm Citi's estimates.
Analyst Christopher Danely, who has a neutral rating and a $55 price target on Intel (INTC), noted that March notebook shipments were up 33% month-over-month. However, that was below expectations of a 42% rise. For the first quarter, shipments fell 20% quarter-over-quarter, worse than the 18% decline the bank was expecting.
"We see this as another yellow flag and believe PC sales could cool off in [the second half of 2022] due to a reversion to the mean after two straight years of double digit growth," Danely wrote, reiterating the neutral rating on Intel (INTC).
Intel (INTC) shares were largely flat in premarket trading on Tuesday at $46.61.
The weakness in the PC market is likely due to the continued shortage in component supplies, some logistical issues and a slowdown in demand for Chromebooks.
There may be a bit of a rebound in the second quarter, as the firm expects notebook shipments to rise 5% quarter-over-quarter, but that would be at the low end of what it normally is, due to the Russian invasion of Ukraine, which may impact demand in Europe, as well as Chinese COVID-related lockdowns.
But any rebound is likely to be short-lived, because even if enterprise notebook demand is "stable," Danely pointed out that the consumer market appears to be "decelerating rapidly."
On Friday, Intel (INTC) Chief Executive Pat Gelsinger reportedly asked Taiwan Semiconductor (TSM), which now makes chips for the U.S. tech giant, for additional capacity.