Intel Corporation (NASDAQ: INTC) has been handed a mega-opportunity to assist NVIDIA Corporation (NASDAQ: NVDA) in its quest to dominate the AI theme. After an investment from the U.S. government and from Softbank, Intel now has billions of dollars more in its arsenal that can be used to solidify its earnings and to stay afloat. Wall Street’s reaction seems surprising on the surface and next-day trading action.
The real question is whether or not Intel can succeed. The stock closed below its opening gap-up price on Thursday and then it was indicated lower on Tuesday as well. It turns out that Wall Street analysts are not rolling out a universal welcome mat for Intel despite more than a 20% gain in a day to a new 52-week high.
Intel shares closed up 22.7% at $30.57 on more than 500 million shares in a single day on Thursday. That represents a 5x volume spike and the stock had a fairly tight trading range after opening Thursday at $31.79 (that range was $30.16 to $32.38, which was also a 52-week high for Intel).
Friday’s opening bell price at 9:30 was $30.43 (versus the $30.57 close) and after nearly 30 minutes of trading Intel’s price was down by 3.4% at $29.53.
The news of the NVIDIA-Intel deal caught many Wall Street analysts by surprise. As such, there are many key analyst calls from large firms on Wall Street that have yet to release any ratings changes and/or price target changes. Some big price target changes have been seen, but there is some serious caution here as well. And none of the major firms are bracing clients for any immediate M&A scenarios based on the news.
Barclays maintained Intel as Equal Weight but raised Intel’s price target to $25 from $19. That said, the analyst did call it “another lifeline.”
Benchmark upgraded Intel to Buy from Hold and set a $43 price target.
CFRA (S&P) maintained its Hold rating but raised its price target to $35 from $24. CFRA noted that this is a vote of confidence for Intel investors and that the expanded partnership is solely for products (which has completely missed the AI boat). Still, CFRA says “we would avoid chasing the shares.”
Citigroup downgraded Intel (INTC) to Sell from an already cautious Neutral rating, although it still hiked its price target to $29 from $24. His view is that Intel’s post-financings rally of more than 50% since last month now puts the stock price reflecting success in Intel’s foundry business — Citi sees a minimal chance of success and now has high valuations on Intel.
Other analyst calls that have been seen with price target changes:
- New Street Research target to $32 from $23
- Northland Securities target to $42 from $28
- Roth Capital has maintained its Neutral rating
Oggonomics will update more research calls as they are made available.
As a reminder, all analyst ratings above and the price targets named are attributed to each frm individually. Oggonomics has no rating system nor any price target mechanism of its own on Intel or related stocks.
