Intel coverage resumed at JPMorgan with an underweight rating


JPMorgan has resumed its coverage of Intel Corp. INTC, +2.25% with an underweight rating and $32 price target. However, research analysts at the bank warned that Intel is playing catch up to rivals such as AMD Inc. AMD, +5.70% in server chips. “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,” wrote JPMorgan analyst Harlan Sur. “We note that it took four years after AMD CEO Lisa Su took the reins of the company (Oct 2014) before the company started to gain meaningful PC/server CPU market share and the stock started to properly reflect these gains.” With Intel CEO Pat Gelsinger taking over in March 2021, JPMorgan expects we won’t start to see meaningful evidence of a turnaround until 2024/25. JPMorgan acknowledges that Intel is not starting from scratch with regard to market share, but warns that the chip maker faces a “formidable” technology gap relative to AMD and Taiwan Semiconductor Manufacturing Co. Ltd. TSM, +4.22% Intel’s stock has fallen 42.2% this year, outpacing the S&P 500 Index’s SPX, +0.92% decline of 17%. Last month Intel shares scored their best one-day rally since the start of the COVID-19 pandemic, boosted by the company’s planned cost cuts and layoffs.

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