Intel (INTC) Update Likely to be a Positive Catalyst, BofA Securities Reiterates Underperform
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BofA Securities analyst Vivek Arya reiterated an Underperform rating and $58.00 price target on Intel (NASDAQ: INTC) after the company scheduled a business update with the new CEO, Pat Gelsinger, next Tuesday (Mar 23).
The analyst stated "We expect the call to be a near-term positive catalyst re. strategic clarity amidst a strong PC market, even though longer-term competitive challenges (against AMD, Arm, NVDA) remain and underlie our cautious stock view. We expect the event to focus on 5 main topics: 1) commitment to US manufacturing: assuring investors (and US regulators) that INTC will maintain majority (read >50%) of production domestic, while outsourcing minority of products to external foundry (already outsources ~20%, so new number could be 30%+); 2) INTC’s willingness to make chips for other US/western customers on a foundry basis, on high yielding 14nm process. This will likely need and get a boost from US government funding (though this could take long time, and INTC has had false starts before); 3) progress on next-gen 7nm manufacturing (likely by using more EUV capability which helps yields but could be expensive); 4) potentially outsourcing barbell of lower end (chipsets, small core/low-end PC/server processors) and highest-end 5nm/3nm computing tiles (chiplets) to TSMC, for products in the CY23E timeframe; and 5) re-committing to a data-centric future for INTC, leveraging incoming-CEOs past VMWare background."
Shares of Intel closed at $65.16 yesterday.
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