As Intel Corp.’s inventory plunged to its greatest one-day drop in about three and a half years, analysts had some harsh phrases for the chip maker.
“How many times can you push the reset button?” Bernstein’s Stacy Rasgon requested in a be aware to shoppers.
While he thought many buyers had been bracing for the corporate to overlook on its first-quarter forecast, the outlook got here in “extremely weak and clearly worse than feared.” Intel
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expects $12.7 billion in income on the midpoint, whereas analysts had been on the lookout for $14.3 billion.
See extra: Intel seen struggling to ‘find its footing’ as steering miss sends inventory tanking
“After yet another major reset this story probably just shifted to 2026 at the earliest for the bulls, and there is a lot of meat for the bears to sink their teeth into in the meantime,” Rasgon wrote, whereas sticking together with his market-perform score and $42 goal value.
Baird’s Tristan Gerra highlighted challenges for Intel’s data-center and artificial-intelligence unit, which is “on track for a third consecutive year of revenue declines,” whereas his personal income forecast implies a 14-year low.
Gaudi, the corporate’s accelerator chip for artificial-intelligence purposes, “does not seem enough to lift [data-center] revenue, while gross margin will be impacted by higher depreciation inclusive of an expected U.S. Chip Act credit,” Gerra continued.
He additionally expressed some issues concerning the firm’s broader street forward.
“Can top-line growth in future years be sufficient to fund continued node migration?” Gerra mentioned. “Many hurdles remain, notably ramping units from this year’s small base (small baseline for Intel 4 makes it more challenging to yield at the next node), while [the Intel Foundry Service] revenue ramp entirely depends on future node execution including yield and performance.”
Gerra has a impartial score and $40 goal value on Intel’s inventory.
Shares fell 11.9% in Friday buying and selling, making for his or her worst single-day proportion decline since July 24, 2020, once they fell 16.2%, in line with Dow Jones Market Data.
Needham’s N. Quinn Bolton, in the meantime, downgraded the inventory to carry from purchase within the wake of Thursday afternoon’s report, calling the earnings reset “unexpected.”
“In addition to an overall worsening risk-reward, Intel’s core [data-center] business is challenged by a shift to accelerated computing architectures and direct competition from AMD and ARM,” he wrote. “We expect AI to remain the spending priority in the data center for the next several quarters. To that end, dollars will continue moving away from Intel’s core competency.”
Read: Missed the boat on AMD’s inventory surge? Why this analyst says you’re not too late.
Rosenblatt’s Hans Mosesmann took the same view as he argued that Intel’s gross sales outlook is “contrary to the uber bullish messaging to the Street and is consistent with share losses to AMD, a lack of any perceivable AI growth vector that moves any dial, and points to another, yes another, transitional year.”
Artificial intelligence “seems like everywhere except at Intel,” he continued, noting that his stance on the inventory “has not changed for many years.” Mosesmann continues to fee it at promote.
Opinion: Intel’s inventory plunge exhibits that Wall Street nonetheless hasn’t discovered its lesson on AI hype
Raymond James analyst Srini Pajjuri, nevertheless, was extra upbeat about Intel’s potential to capitalize on AI. “While Intel won’t likely get much credit for AI in the near term, we are encouraged by the growing pipeline for Gaudi accelerators ($2b+) and expect meaningful revenue contribution” within the second half of 2024, he wrote, whereas sticking together with his outperform name however slicing his goal value to $52 from $54.
Source web site: www.marketwatch.com
