By Analysts are expressing concerns about Intel Corp. as the company’s stock experiences its biggest one-day drop in over two years. Bernstein analyst Stacy Rasgon questions how many times Intel can “push the reset button.” Rasgon notes that while investors were prepared for the company to miss its first-quarter forecast, the outlook was even worse than anticipated. Intel expects $12.7 billion in revenue, falling short of analysts’ expectations of $14.3 billion.
Rasgon believes that the company’s story may not regain traction until at least 2026, which gives plenty of room for the bears in the meantime. Despite this outlook, Rasgon maintains a market-perform rating and a $42 target price for Intel’s stock.
Baird analyst Tristan Gerra draws attention to challenges in Intel’s data-center and artificial-intelligence unit, which is on a path to experience revenue declines for the third consecutive year. Gerra’s own revenue forecast suggests that the company is headed for a 14-year low.
Gerra expresses doubts about whether the company’s accelerator chip for artificial-intelligence applications, called Gaudi, will significantly boost data-center revenue. Additionally, he points out that higher depreciation, including an expected U.S. Chip Act credit, will impact gross margin. Gerra also raises concerns about Intel’s overall future trajectory.
He questions whether future years will bring sufficient top-line growth to fund continued node migration. Gerra highlights hurdles such as ramping up units from a small baseline this year, making it more challenging to yield at the next node. Furthermore, he notes that revenue ramp for the Intel Foundry Service heavily relies on future node execution, including yield and performance.
Gerra maintains a neutral rating and a $40 target price for Intel’s stock.
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