Bernstein Urges Avoidance of Intel (INTC) Shares Despite Big U.S. Investment

Intel Corporation (NASDAQ:INTC) is one of the AI Stocks Analysts Are Tracking Closely. On August 25, Bernstein SocGen Group analyst Stacy Rasgon reiterated a Market Perform rating on the stock with a $21.00 price target.

The rating follows the US government and Intel’s joint announcement that U.S. government will purchase $8.9 billion in Intel’s common stock under an agreement with the Trump Administration.

Stacy Rasgon recommends an “avoidance of Intel’s shares.”

The company is issuing ~520M new shares—including 433M to the U.S. government at $20.47 each and 87M to SoftBank at $23. This will dilute existing shareholders by ~11%, with the U.S. becoming Intel’s largest shareholder.

A stock market graph. Photo by Alesia Kozik on Pexels

Rasgon believed that the news may limit short-term downside. However, structural issues remain that will keep Intel unattractive over the long-term.

“At this point we continue to recommend avoidance of Intel’s shares. They feel like a tough short given this kind of newsflow in the short term, but the structural issues still feel massive keeping us away from the long side. We make no changes to our model at this time. We rate Intel’s stock Market-Perform, $21 PT.”

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