By Senad Karaahmetovic
JPMorgan analysts downgraded shares of Intel (NASDAQ:INTC) to Underweight with a $32 per share price target. At the core of their new target lies the belief that Intel will need some time before the chipmaker regains its competitiveness.
Difficult macro headwinds, questions about the management’s ability to execute a complex turnaround, and strong competition, are all weighing on the investor sentiment about Intel.
The analysts remind investors that it took 4 years for Lisa Su, CEO of AMD (NASDAQ:AMD), to drive solid market share gains since she took control of the company in 2014. Hence, the analysts say it may not be until 2024/25 before Intel’s CEO Pat Gelsinger can deliver on expectations and the Intel stock starts to properly reflect better fundamentals.
“After several years of server CPU share loss to AMD and continued product execution missteps, we believe it will be several years before Intel is able to reverse the tide to reclaim technology leadership in hopes of regaining market share,” they said in a note.
All-in-all, the analysts continue to see Intel stock underperforming over the next 12-18 months, hence the new Underweight rating. Instead, investors seeking to gain/increase exposure to the semi sector should look at NVIDIA (NASDAQ:NVDA, Marvell (NASDAQ:MRVL), and GlobalFoundries (NASDAQ:GFS).
At 09:00 ET (14:00 GMT), Intel stock price is trading about 2% lower.