Intel (INTC) shares have surged in recent months, helped by optimism over its balance sheet improvements and hopes for growth in its chipmaking unit. But Bank of America Securities analyst Vivek Arya believes the stock’s rally has gone “too far, too fast.” In a new report, Arya downgraded Intel to Underperform from Neutral while keeping a $34 price target, signaling 6% potential downside ahead.
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It is worth noting that Arya ranks 263 out of more than 10,000 analysts tracked by TipRanks. He has a success rate of 61%, with an average return per rating of 17.2% over a one-year timeframe.
Why BofA Is Turning Cautious on Intel
Arya warned that Intel’s strong market run, which added nearly $80 billion in market value, already prices in most of the good news. In his view, the company’s fundamentals have not improved enough to justify such a sharp move.
He noted that Intel’s AI portfolio and strategy remain unclear, and its server CPU lineup is “uncompetitive,” leaving it at a disadvantage in the fast-growing data center market.
Meanwhile, Arya also questioned the market’s growing confidence in Intel’s foundry plans. He explained that investors should not expect Intel’s foundry unit to become a strong profit source anytime soon. Arya noted that Intel still depends on TSMC (TSM) for about 30% of its chip production, which shows it is not yet an independent manufacturer. He also warned that the cost and success rate of Intel’s new 18A and 14A chips are still unclear, which makes its recovery story harder to believe.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on two Buys, 27 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 55.16% rally in its share price over the past year, the average INTC price target of $27.98 per share implies a 23.80% downside risk.
