Intel capital structure ‘noise’ means little to fundamentals, says BofA

BofA notes media reports that suggest the U.S. government might convert its prior funding into a 10%, non-voting equity stake in Intel (INTC), adding that it sees both positives of such a move as well as “likely pitfalls.” Softbank has also taken a $2B strategic stake in Intel, which the firm calls “more promising but not a game-changer.” In the end, the stock likely remains range-bound until there is clarity around the company’s manufacturing progress, argues the analyst, who contends that government intervention or new investors will not help the company in closing its manufacturing gap against TSMC (TSM), its AI portfolio gap against well-known GPU and ASIC rivals, or its CPU share gap against AMD (AMD) or ARM-based (ARM) rivals. The firm, which still believes Intel’s path-forward “invariably comes down to its manufacturing competitiveness,” reiterates a Neutral rating and $25 price target on the shares.