Bernstein sees TI’s likely price hike benefiting Infineon, Renesas stock
Investing.com -- Bank of America told investors on Tuesday that it views Intel’s recent shift in strategy as a “credit positive,” highlighting a more sensible foundry approach focused on “greater scrutiny” of customer alignment and returns.
BofA notes Intel’s plan to engage customers early to “form demand before capex spend,” which should reduce execution risk around its 14A node development.
BofA says if Intel (NASDAQ:INTC) proceeds under this approach, the company could resemble a “fabless/quasi-fabless semiconductor, with materially lower capital intensity and commensurately lower liquidity needs,” supported by $21 billion in cash as of June 28.
This shift could pave the way for “material debt reduction,” said Bank of America analysts.
Despite this, BofA cautions many challenges remain, including “stemming market share losses,” reinvigorating its product line for AI workloads, and resolving uncertainties around the 18A node.
Additionally, geopolitical and management issues, including opposition to CEO Lip-Bu Tan and reports of board turbulence, add complexity.
On debt, BofA does not expect Intel to issue new debt soon, citing the company’s aim to “strengthen the balance sheet and de-lever.”
Intel’s upcoming maturities include $2.25 billion in July and $1.5 billion in March 2026. BofA anticipates Intel could use a mix of commercial paper and cash on hand, possibly supported by asset sales such as Mobileye, Altera, or a portion of its Network and Edge (NEX) business.
BofA lowered its 2025 and 2026 EBITDA estimates for Intel by 8% and 18% respectively, reflecting softer revenue and margins. They forecast gross leverage at 4.1x by year-end 2025, slightly higher than prior estimates.