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Intel stock is down by double digits over the past 12 months, while the S&P 500 has taken off.
Courtesy of Intel
Investors shouldn’t get too excited about the likelihood that Intel will deliver positive results, Susquehannah analyst Christopher Rolland says.
On Wednesday, analyst Christopher Rolland reaffirmed his Neutral rating for
Intel
stock (ticker: INTC) and raised his target for the price to $35 from $33. The company will report its second-quarter earnings on July 27.
“We expect Intel to post a modest beat and raise, but the longer-term sustainability of this momentum has yet to be determined,” he wrote. “AI remains a mixed story for Intel … we remain cautious on Intel’s server competitiveness for the next several years.”
In Wednesday trading, Intel stock was unchanged at $34.50. The stock has fallen 14% over the past 12 months, while the
S&P 500
is up 15%.
The analyst is concerned that more spending on data-center infrastructure may shift to graphics processing unit chips for artificial intelligence, leaving less for Intel’s server processors. A second issue he sees is that Intel could lose market share within the server segment next year.
“Without meaningful hyperscale [cloud] capex increases this quarter, we fear AI server GPU purchasing could crowd out wallet share for CPUs,” he wrote.
Wall Street is generally mixed on Intel stock. According to FactSet, 21% of analysts covering the company have ratings of Buy or the equivalent on Intel, while 64% have Hold ratings, and 14% have Sell ratings on the shares.
Write to Tae Kim at [email protected]
Source: https://www.barrons.com/articles/intel-stock-earnings-outlook-artificial-intelligence-167138dc?siteid=yhoof2&yptr=yahoo