Intel Not Out of Woods Yet

On Jan. 3,

We note shares of Intel rebounded slightly in the aftermath of its press release articulating the points made in the call, while shares of AMD retreated slightly from intraday highs. Our biggest takeaway is that the average computer user should not see any significant performance impacts, contrary to earlier speculation. Nevertheless, Intel will remain under scrutiny as it rolls out its mitigation solutions and the performance of “cured systems” is intensely analyzed. We are maintaining our wide moat rating and $36 fair value estimate for Intel, and we continue to see shares as overvalued due to potential execution risk following its recent acquisitions and pivoting into new artificial intelligence and automotive end markets. Our no-moat rating and $9 fair value estimate for AMD is also reiterated, and we believe the market is overoptimistic on the firm’s prospects against Intel and Nvidia.

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