{"id":26170,"date":"2023-06-22T17:29:03","date_gmt":"2023-06-22T21:29:03","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/intels-first-major-contract-foundry-customer-still-a-mystery-as-analysts-sift-through-presentation\/"},"modified":"2023-06-22T17:29:05","modified_gmt":"2023-06-22T21:29:05","slug":"intels-first-major-contract-foundry-customer-still-a-mystery-as-analysts-sift-through-presentation","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=26170","title":{"rendered":"Intel\u2019s first major contract foundry customer still a mystery as analysts sift through presentation"},"content":{"rendered":"
\n

Intel Corp. stock ended Wednesday as the worst performer in the Dow Jones Industrial Average for a second day in a row as analysts appeared disappointed that the chip maker did not name a major customer for its fledgling third-party foundry business as hoped.<\/p>\n

On Wednesday, Intel
\n INTC,
\n -0.58%<\/bg-quote>
\n held an online event with Wall Street analysts to outline changes on how it will account for its manufacturing unit separately from its products business in the first quarter of 2024, and said it hoped to name a major customer for its Intel Foundry Services, or IFS, business that it hopes to use to compete with Taiwan Semiconductor Manufacturing Co.
\n TSM,
\n +1.47%<\/bg-quote>.<\/span>\n <\/p>\n

\n

Intel operates its own foundries \u2014 or fabs, those high-tech plants that create the silicon wafers onto which transistors are etched to make microchips \u2014 unlike other chip makers that are \u201cfabless,\u201d like Nvidia Corp.
\n NVDA,
\n -0.05%<\/bg-quote>,<\/span>
\n Advanced Micro Devices Inc.
\n AMD,
\n -1.26%<\/bg-quote>,<\/span>
\n Qualcomm Inc.
\n QCOM,
\n +0.55%<\/bg-quote>,<\/span>
\n and Apple Inc.
\n AAPL,
\n +1.65%<\/bg-quote>,<\/span>
\n which use third-party fabs like TSMC for their chips. <\/p>\n

Read:<\/strong> Why Intel was the Dow\u2019s worst performer for a second day in a row<\/p>\n

Evercore ISI analyst C.J. Muse, who has an in-line rating and $36 price target, joined other analysts in stating Intel is in for the long haul, reiterating his \u201ctactical long\u201d on the stock, in-line rating and low $30s price target.<\/p>\n

\u201cWe believe this transition will be a positive from both a cost perspective (accountability for business units is big) and customer confidence perspective \u2014 with the transparency and allowance for greater competition likely proving beneficial to the roadmap and execution,\u201d Muse said.<\/p>\n

\u201cOverall, we are positive on the moves Intel is making to improve the company\u2019s operations, execution and competitive positioning,\u201d Muse said. \u201cThat said, it is still an uphill battle to regain leadership \u2014 which will take several years to play out while [data-center] spend continues to shift towards accelerated architectures (potentially at the detriment to CPU growth).\u201d<\/p>\n

Read from Tuesday: <\/strong>Intel stock drops as foundry capacity buildout plans have one analyst predicting a company split <\/p>\n

KeyBanc Capital Markets analyst John Vinh, who has a sector weight rating and a $35 price target, wondered whether the changes would be enough to boost the foundry business.<\/p>\n

\u201cWhile we think this internal realignment makes sense and is necessary, we believe it\u2019s unclear whether this will be enough to help Intel achieve leadership in IFS,\u201d Vinh said. \u201cOur concern is that business units will ultimately have limited freedom to truly flex capacity externally, thereby limiting accountability on internal foundry.\u201d<\/p>\n

Read also: <\/strong>Opinion:\u00a0Intel confirms it will be a long slog for its foundry business<\/p>\n

Susquehanna Financial analyst Christopher Rolland, who has a neutral rating and a $33 price target, said the event \u201cultimately lacked the meaningful customer announcements\u201d and that many were hoping Intel would use the event to name a meaningful IFS customer, like Nvidia, but to no avail.<\/p>\n

Of the 41 analysts who cover Intel, seven have buy-grade ratings, 28 have hold ratings, and six have sell ratings, along with an average price target of $32.87, according to FactSet data.<\/p>\n

As of Wednesday\u2019s close, Intel shares are up 24.5% year to date, compared with a 2.4% gain by the Dow Jones Industrial Average
\n DJIA,
\n -0.01%<\/bg-quote>,<\/span>
\n a 40.2% surge by the PHLX Semiconductor Index
\n SOX,
\n +0.57%<\/bg-quote>,<\/span>
\n a 13.7% advance by the S&P 500 index
\n SPX,
\n +0.37%<\/bg-quote>
\n and a 29% rally by the tech-heavy Nasdaq Composite Index
\n COMP,
\n +0.95%<\/bg-quote>.<\/span>\n <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Intel Corp. stock ended Wednesday as the worst performer in the Dow Jones Industrial Average for a second day in a row as analysts appeared disappointed that the chip maker did not name a major customer for its fledgling third-party foundry business as hoped. On Wednesday, Intel INTC, -0.58% held an online event with Wall […]<\/p>\n","protected":false},"author":1,"featured_media":26171,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-26170","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nIntel\u2019s first major contract foundry customer still a mystery as analysts sift through presentation | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Intel Corp. stock ended Wednesday as the worst performer in the Dow Jones Industrial Average for a second day in a row as analysts appeared disappointed\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=26170\" \/>\n<meta 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