Intel Corp.'s recent earnings report has convinced at least one analyst that the company's most challenging times are behind it. However, despite Intel shares surging 10.3% in Friday trading, signaling their best single-day performance in a year, other Wall Street analysts appear less convinced about the company's future prospects.
Bernstein analyst Stacy Rasgon acknowledges that Intel seems to have turned a corner and that a PC-focused narrative could provide some temporary support. However, he still has reservations, particularly regarding data-center trends, which he believes are facing substantial challenges in terms of both revenue and profitability. He also suspects that Intel might be losing market share and that its artificial intelligence story remains somewhat limited. Additionally, he points out the company's cash burn. Despite these concerns, he raised his target price to $36 while maintaining a market-perform rating.
Baird analyst Tristan Gerra shares a similar perspective, noting Intel's recovery in revenue and gross margin but highlighting the company's ongoing challenges, including generating enough revenue growth to support future node migrations. Gerra rates the stock as neutral with a $40 target.
HSBC analyst Frank Lee, who previously held a bearish view on Intel, has upgraded the company to a "Hold" rating due to expectations of better earnings driven by improved execution and a more positive PC outlook. He remains cautious, especially about the data center's recovery.
Chris Caso of Wolfe Research maintains a bearish stance on Intel, expecting the client segment to normalize and the data center segment to continue lagging, with continued market share losses. He expressed concerns about Intel's cash flow and margin improvement prospects, keeping a $31 target.
Raymond James analyst Srini Pajjuri is more optimistic, highlighting emerging opportunities in artificial intelligence and the company's Gaudi 2 accelerator pipeline. He believes that sentiment will improve as Intel moderates its share losses, executes better, recovers its margins, progresses in its foundry efforts, and seizes AI opportunities. Pajjuri maintains an outperform rating and raises his price target to $42, describing Intel's story as entering a "higher gear."
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