Intel stock rating upgraded to Hold by Erste Group on transformation progress

Investing.com - Erste Group has upgraded Intel (NASDAQ:INTC) stock rating from Sell to Hold, citing the company’s ongoing transformation and recent manufacturing technology improvements. The upgrade comes as Intel’s stock has surged nearly 20% in the past week, though InvestingPro data indicates the stock is currently in overbought territory.

The upgrade follows Intel’s success with its manufacturing technology, which has enabled the chipmaker to increase production speed, according to Erste Group. With a market capitalization of $137.6 billion and annual revenue of $53.1 billion, Intel remains a dominant force in the semiconductor industry.

The research firm noted that major semiconductor companies NVIDIA and Broadcom are already testing Intel’s production platform, signaling potential growth in Intel’s contract manufacturing business.

Erste Group highlighted NVIDIA’s recent USD 5 billion investment in Intel and their collaboration to jointly develop data center and PC products as a significant positive development.

The research firm stated that if Intel succeeds in winning additional semiconductor companies as customers for its contract manufacturing services, the group should return to profitability in the medium term.

In other recent news, Intel Corporation has announced a strategic partnership with Nvidia to develop custom data center and personal computing products. This collaboration aims to integrate Nvidia’s accelerated computing and AI stack with Intel’s x86 CPU architecture, utilizing Nvidia’s NVLink technology. Barclays has responded to this development by raising Intel’s price target to $25, citing expanded data center opportunities, while maintaining an Equalweight rating on the stock. Stifel has kept its Hold rating on Intel, with a price target of $24.50, focusing on the product development aspects of the partnership.

Additionally, Baird has described the collaboration as "incrementally positive" for Intel, suggesting potential market share gains and growth in foundry revenue. Meanwhile, Bank of America has downgraded Intel’s long-dated bonds from Overweight to Marketweight, following a rally in prices after the Nvidia news. In a related development, Erste Group upgraded ASML’s stock rating to Buy from Hold, highlighting ASML’s investment in the French AI startup Mistral as a strategic move to diversify revenue streams. These updates reflect the latest shifts in the semiconductor industry, with significant implications for both Intel and ASML.

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