Intel (NASDAQ:INTC) stock is up about 8% in after-hours trading as the company jumped to profit in Q2 and delivered stronger-than-expected results. Meanwhile, management now expects a sequential improvement in sales and margins. Despite the solid quarterly performance and upbeat outlook, Wall Street analysts didn’t change their stance on INTC stock, with most of them either recommending a Hold or a Sell, implying it’s not the time to go long.
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Analysts Weigh In
Intel’s second-quarter results exceeded expectations, indicating continued financial improvement. At the same time, the accelerating AI (artificial intelligence) opportunity bodes well for growth. However, this hasn’t led analysts to change their stance on INTC stock.
Following the Q2 earnings, Goldman Sachs analyst Toshiya Hari reiterated a Sell recommendation on Intel stock. While the analyst acknowledged the company’s solid execution in the second quarter, he awaits a recovery in the “valuation-enhancing Data Center market” to turn constructive on INTC stock.
Along with Hari, Rosenblatt Securities analyst Hans Mosesmann also reiterated a Sell rating on Intel stock following its Q2 performance. Mosesmann expects the company to lose market share to Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), and Marvell (NASDAQ:MRVL).
Echoing similar sentiments, Tristan Gerra of Robert W. Baird expects AMD to gain further market share against Intel in 2023. The analyst maintained his Hold rating on the stock.
Like Gerra, Vijay Rakesh of Mizuho Securities also reiterated a Hold on INTC stock on July 27. While the analyst raised his revenue and EPS estimates for Q3 and increased the price target to $36 from $33, he retained a Hold as he believes that the company faces “challenges with AI spend eating into DC (Data Center) budgets.” Further, the competition from AMD remains a drag.
Is Intel a Buy, Sell, or Hold?
Intel is poised to benefit from easing inventory and margin headwinds. Further, Intel Foundry Services is well-positioned to capitalize on the AI market opportunity. In addition, management remains upbeat about the PC market in the long term.
However, market share losses to competitors, manufacturing delays, and challenges in the Data Center market could continue to limit the upside potential in INTC stock.
Intel has received two Buy, 12 Hold, and five Sell recommendations for a Hold consensus rating. Analysts’ average price target of $32.32 implies 6.45% downside potential from current levels.
