Bank of America Downgrades Intel (INTC) to Underperform After $80B Market Cap Surge

Intel Corporation (NASDAQ:INTC) is one of the AI Stocks in Focus on Wall Street. On October 13, Bank of America downgraded the stock to “Underperform” from Neutral. It believes that the stock has run too far, too fast.

“We downgrade INTC to Underperform from Neutral while maintaining ests. and $34 PO.”

According to the firm, the $80B rise in Intel’s market cap already fully reflects its improved balance sheet and potential growth from (external) foundry.

However, Intel is yet to face several challenges, considering it doesn’t have a discernible AI portfolio/strategy and has an uncompetitive server CPU. Moreover, it is less flexible now compared to when it was in divesting loss-making manufacturing.

The company has struggled to regain market share from competitors and lost leadership in both the personal-computer and server central processing unit markets. This is mainly due to subpar chips compared to those from AMD and ARM.

Speaking of its discernible artificial-intelligence strategy, the firm believes that Intel doesn’t have a so-called AI accelerator product, which is a piece of specialized hardware designed to speed up AI workloads.

While Intel has been trying to develop or acquire new AI accelerator assets, “but at this point the project seems to be either in a halt or no longer a focus area given the struggles in the existing CPU business as well.”

Overall, the firm expects INTC to be unprofitable by the end of calendar 2027.

Intel Corporation (NASDAQ:INTC) designs, manufactures, and sells computer products and technologies, delivering data storage, computer, networking, and communications platforms.

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