Intel’s Big Chip Technology Delay: What Wall Street’s Saying
Shares of Intel (INTC) - Get Report dropped 15% to $51.21 on Friday after the chip maker said that its new 7-nanometer process technology, a key component in its strategy to take on market-leading rivals such as Taiwan Semiconductor (TSM) - Get Report, is around six months behind schedule, adding that it may have to seek outside help in order to catch-up.
"We're going to be pretty pragmatic about if and when we should be making stuff inside or making outside, and making sure that we have optionality to build internally, mix and match inside and outside, or go outside in its entirety if we need to," CEO Bob Swan told investors on a conference call.
Here's what Wall Street is saying about Intel Friday:
BMO Capital (Market Perform Rating Unchanged, PT Lowered From $55 to $50)
"Not that long ago, Intel and manufacturing prowess were synonyms. No
more. The unthinkable may not be that far away when Intel is forced to acknowledge
that the growing gap between it and the TSMC camp is an insurmountable chasm, and
outsource key parts of its manufacturing/process technology."
-Ambrish Srivastava
Wedbush (Underperform Rating Unchanged, $51 PT)
"We have articulated for some time that we believe Intel will remain pressured to
maintain share over the intermediate term (into 2022) given: 1) AMD’s improved
portfolio, and 2) INTC’s previous struggles that have left it in a position where the best
case scenario appears to be a situation where INTC roughly maintains product parity
through its 10nm and 7nm node production."
-Matt Bryson
Loop Capital (Sell Rating Unchanged, PT lowered From $59 to $50 )
"The largest driver of our Sell rating has been Intel falling at least a node behind in manufacturing lithographies, which has allowed AMD to gain market share with its latest family of architectures. We believe this thesis is playing out as expected, with some evidence being obscured by the impact of the coronavirus."
-Cody Acree
Jefferies (Hold Rating Unchanged, $62 PT)
"Near term, we think INTC's Data Center and Notebook
PC business is benefiting from Work-from-Home
trends driven by COVID-19 shelter-in-place restrictions
. Longer term, we argue there is a tectonic shift in computing toward a parallel model, and as the
incumbent with dominant share, we think INTC has the
most to lose."
-Mark Lipacis
Gloss