Susquehanna analyst Christopher Rowland on Thursday said Intel Corp. ended his bearish call on shares of, and wrote that “things are moving in the right direction” for the chipmaker. He upgraded the stock to neutral from negative Thursday as part of a broader reassessment of the chip landscape. “In April 2021, we saw peak demand for the semiconductor cycle, driven by a combination of sky-high valuation multiples and record lead times, often forcing ‘bad behavior’, including inventory accumulation, safety stock building and double ordering. Included. ” He wrote. “Today, however, we call the bottom in this cycle. Well … at least for the consumer, PC and handset-related names, as we believe the sharp part of the contraction has passed, inventory levels are normal. occurs and initial demand shoots appear.” On Intel INTC, +4.42% in particular, he noted that the company has improved some of his areas of concern when he went on a bearish trend last year, although other fears still persist. Shares were up 0.5% in premarket trading on Thursday. “Although most of our primary concerns remain, three of these concerns have been reduced or mitigated,” he wrote. Notably, “AMD is no longer gaining PC share,” Roland continued. “With Alder Lake and Raptor Lake both benchmarking and selling well, Intel is more competitive today.” He added that he has spoken to experts who say Intel “holds the price/performance crown” in the current PC market, suggesting the company will maintain or potentially gain that market share this year. Additionally, Rowland highlighted that Intel’s management team is performing better. “While Intel’s difficulties at 10nm were known, Sapphire Rapids was the latest roadmap push,” he wrote. “Our investigation did not identify any new pain points and delayed products. No news here is good news.” Additionally, although Roland worried about a “hangover” in the PC market last year because of the work-from-home boom ending, he says the dynamic has “largely run its course.” Still, Rowland declined to turn bullish on Intel’s stock, writing that “major issues remain” for the company, including a softening of the company’s data-center forecast. He is a Qualcomm Inc. Shares of QCOM, +3.79% and SWKS, +2.09% led the bullish trend, upgrading both from neutral to positive. Rowland likes Qualcomm’s position as China moves toward reopening and smartphone trends improve there, and he thinks Skyworks could also benefit from the reopening.
