| | | Intel Stock Recovers on Signs of Strong Demand for Personal Computers, Servers -- Barrons.com
DOW JONES & COMPANY, INC. 1:27 PM ET 4/6/2020
Symbol Last Price Change | INTC | 57.31 | +3.18 (+5.87%) | | MU | 45.22 | +4 (+9.7%) | | QUOTES AS OF 01:27:44 PM ET 04/06/2020 |
Wall Street analysts are warming up to Intel(INTC) shares as demand remains robust for data center servers and notebook computers for people who are working from home and relying on a range of cloud-based software services.
Late last month, memory chip company Micron Technology(MU) said it was seeing strong demand from both personal computer and data center customers. That news gradually has triggered some rethinking about the outlook for companies that make personal computers, servers and related components.
On Monday, Raymond James chip analyst Chris Caso lifted his rating on Intel(INTC) shares (INTC) to Market Perform from Underperform for exactly that reason.
"Our upgrade is primarily based on our view that the company is exposed to the right end markets for this pandemic -- namely, notebooks and data center," Caso writes in a research note. "While we expect the current surge in notebook sales to be relatively short-lived and roll off in the back-half of the year, cloud and service provider data center spending is expected to remain strong through 2020."
He added that "given the relatively rapid change in market conditions -- which both are set to benefit Intel(INTC) in the near term -- we feel our Underperform rating was no longer appropriate."
Last week, Barclays analyst Blayne Curtis made a similar call, raising his rating on the stock to Equal Weight from Underweight, and lifting his price target to $58 from $52.
"We definitely don't believe Intel(INTC) has solved its roadmap issues," Curtis writes, referring to some of the company's ongoing competitive issues with Advanced Micro Devices (AMD), which has been taking market share from Intel(INTC) in recent quarters. "However, we do believe near-term strength in both the data center and increased work from home trends should supersede ongoing challenges," he writes. "The Covid shutdown should spur additional PC spend...we believe the stock will work higher."
Curtis inched up his EPS estimates for Intel(INTC) to $5.11 from $4.95 for 2020, while trimming his 2021 view to $5.01 from $5.06.
Both analysts continue to have concerns about competition from Advanced Micro Devices, and Curtis worries that some of the additional demand is pulling in revenue that would have appeared anyway in 2021.
Intel (INTC) shares earlier on Monday were up 5.9%, to $57.34. The chip maker's shares are down about 15% since peaking at $67.46 on Feb. 12.
Write to Eric J. Savitz at eric.savitz@barrons.com |
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