Bernstein Keeps Market Perform on Intel, $25 Price Target

Bernstein SocGen Group analyst Stacy Rasgon reiterated a Market Perform rating and $25 price target on Intel (NASDAQ: INTC).

“Intel’s Q4 results were decent vs expectations ($14.3B/$0.13 vs Street $13.8B/$0.12).

CCG and NEX came in stronger than expected (the former likely boosted somewhat by pretariff builds); DCAI was in-line.

GMs at 42.1% were ~260bps above on an unforcasted CHIPS act benefit and higher revenues, offset partially by Gaudi inventory reserves.

EPS beat by a penny, weighed on by a $750M accrual as Intel paid to reduce their SCIP commitments.

However, Q1 outlook was very light ($12.2B/$0.00vs Street $12.8B/$0.08).

Within the product group all segments (CCG, DCAI, and NEX) are seen declining at roughly the same rate (likely ~15% QoQ), on seasonality and cautious macro, PC inventories, and competition.

Q1 GMs outlook is 330bps below consensus and seems likely to remain under pressure as Lunar ramps and they price to pursue share. Gross capex was lowered to $20B.

At this point bad results from Intel no longer burn the way they used to as investors are likely growing numb to the company’s travails.

And frankly beats or misses on their business fundamentals likely take a back seat for now to the impending CEO transition (if we get one) and what they and the board might choose or not choose to do with the company.

That being said, there appear to be other structural issues that may be brewing here.

While commentary on the health of 18A and the process roadmap remains positive, they have now delayed the lead product on that node (Clearwater Forest, now pushed out a year to 1H26), talked about outsourcing mix increasing on Nova Lake relative to Panther, and discussed an openness to outsource future datacenter products, all which makes us nervous.

The AI accelerator story looks dead with the cancellation of Falcon Shores as a saleable product.

And the company is clearly going to be far more aggressive on the pricing front for now, bringing even more risk to margins.

The stock actually rose in the aftermarket, perhaps due to positioning into the print (and maybe on a view that things are getting so bad that something has to happen, which in our mind is really the only reason anyone would want to be here).

Frankly that is not a call we want to make; we would continue to advocate avoidance. Lowering estimates, offset by rolling horizon forward; maintaining our $25 PT and MP rating.”

This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.