Intel Corporation (NASDAQ:INTC) is one of the Trending AI Stocks on Wall Street. On October 8, HSBC analyst Frank Lee downgraded the stock from “Hold” to “Reduce” and raised its price target to $24.00 (from $21.25).
The firm believes that Intel’s rally since August is largely due to short-term investment deals, rather than an improvement in its long-term performance.
The company’s turnaround is dependent on fixing its foundry operations. However, it continues to face execution failures.
“A TSMC technology deal – which we think is the only one that matters – is unlikely despite potential for future investments,” analysts at HSBC noted.
The company has recently announced three major deals that drove a significant stock re-rating”
“1. SoftBank investing USD 2 billion;
- The U.S. administration investing USD 11.1 billion for a 9.9% equity stake; and
- NVIDIA investing USD 5 billion for an approximately 4% stake.”
“Although these deals were executed at a discount to market price, Intel’s stock has risen 55% since the first announcement in August. We expect additional deal announcements that could drive further short-term re-rating. However, we maintain that Intel’s own fabrication (fab) execution remains the key to achieving a sustainable turnaround.
Given this, we believe the recent re-rating is overdone and are downgrading Intel to Reduce from Hold.”
Intel Corporation designs, manufactures, and sells computer products and technologies, delivering data storage, computer, networking, and communications platforms.
READ NEXT: 10 Hot AI Stocks to Keep on Your Radar and 10 AI Stocks Every Investor Should Watch