Intel (NASDAQ:INTC) has faced persistent struggles in recent years, with the beleaguered chipmaker continually seeking strategies to rejuvenate its business.
With 1Q25 earnings slated for release tomorrow (Thursday) after market close, new CEO Lip-Bu Tan will lead his first conference call, marking a fresh start for the company.
But according to Wedbush Matt Bryson, an analyst ranked in the top 3% of Wall Street stock experts, there won’t be much to celebrate.
Ahead of the print, Bryson has made some changes to his model and none of them are positive. In anticipation of softer demand for both PCs and servers than previously expected, Bryson has lowered his 2025 outlook for Intel’s CCG (client computing group) and DCG (data center group) divisions.
Additionally, Bryson thinks there’s a chance Intel could lose more market share in China – on the assumption tariffs tied to wafer origin come into play. The company could also adopt more aggressive pricing strategies to defend its market position, which, along with lower ASPs (average selling prices) and reduced factory utilization, could put further pressure on margins.
“Our model likely does not fully reflect these risks and if anything, we believe there is a greater chance our 2025 numbers prove too ambitious,” the 5-star analyst went on to ominously add.
That risk is likely to materialize more in the second half of the year, though, as Intel could experience stronger momentum in Q2 than Bryson’s model currently factors in. This will be driven by OEMs and ODMs pulling in orders earlier than usual to build up inventory ahead of potential tariff implementations.
That said, with Intel currently trading close to its equity value, Bryson views the near-term results as “less important.” Instead, the analyst believes the “next likely catalyst” for the stock will be the launch of 18A/Panther Lake. That is the first processor based on the 18A process, which is expected to launch in the second half of 2025.
“A strong launch would likely buoy the stock as investors look beyond current financial woes (we have only recently encountered a bit more positive feedback on this front),” said Bryson on the matter. “Conversely, continued struggles would likely only increase concerns around Intel’s future with no clear path forward for Intel to separate its businesses (in our view).”
For now, Bryson sticks with a Neutral rating on Intel shares, and trims his price target from $20 to $19, implying about 8% downside from current levels. (To watch Bryson’s track record, click here)
So, that‘s the Wedbush view, but what does the rest of the Street make of Intel’s prospects right now? Most other analysts – 26, in total – also remain on the sidelines and with an additional 4 Sells and 1 Buy, the stock claims a Hold (i.e., Neutral) consensus rating. The average price target clocks in at $22.44, suggesting the stock will gain ~9% in the months ahead. (See INTC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.