10 AI Stocks in Focus on Wall Street

7. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 82

Intel Corporation (NASDAQ:INTC) is one of the 10 AI Stocks in Focus on Wall Street. On September 19, Citi downgraded the stock to “Sell” from Neutral Citi following its agreement with Nvidia on Thursday. The firm raised the price target to $29 from $24 on the stock.

While others believe that Nvidia’s partnership with Intel is going to be a turning point for the struggling chipmaker, Danely thinks otherwise. According to him, Intel is already pricing in foundry success, which he believes is highly unlikely.

He has warned that Intel’s foundry unit may not be successful in effectively competing with TSM and similar established players. The partnership with Nvidia may provide it with a short-term boost, but will not be able to fix its deeper problems in the manufacturing business.

The downgrade, therefore, comes mainly from valuation. Danley believes that Intel has rallied enough to levels that assume turnaround is complete. Since the foundry business is uncertain, there is more risk than reward at the current price.

“We downgrade Intel from Neutral to Sell due to Intel’s valuation and our belief that the stock is pricing in success in its leading-edge foundry business, which we believe has minimal chance to succeed.”

Intel Corporation (NASDAQ:INTC) designs, manufactures, and sells computer products and technologies, delivering data storage, computer, networking, and communications platforms.