Intel Key Headwinds Still Persist Following Innovation Event - BofA

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Intel (NASDAQ:INTC) held its Innovation event on Wednesday, laying out a detailed roadmap of client and data center products.

Following the event, BofA, which has an Underperform rating and a $30 per share price target on the stock, released a note outlining the firm's key takeaways, remarking that key headwinds still persist for the company.

BofA attended the event virtually. Intel remains on track for their five process nodes in four years goal, although they "continue to question their IDM strategy as a whole."

The company also revealed its next-gen Intel 7 Desktop CPU Raptor Lake, slated for October. "Notably, the processor maintains last gen's flagship price at $589 and is less expensive than AMD's $699. While INTC is aggressively defending its market share in CPUs, we note INTC has likely been facing cost increases over the past year, and this may further pressure margins," BofA wrote.

In addition, Intel was also said to have launched its "long-awaited" Ponte Vecchio data center GPU as well as the Arc A Series desktop GPUs.

"Notably, the Arc series cards arrived after encountering numerous delays and have a process node disadvantage vs. competition (INTC 6nm, AMD 5nm, NVDA 4nm)," BofA explained.

Finally, BofA stated Intel continues to expand into AI/ML solutions and announced Intel Geti, a computer vision platform that enables mainstream AI for enterprises.

"Overall, INTC continues to make strides in becoming an end-to-end client/data center provider, i.e. expanding into AI/graphics/accelerators. However, today's announcements don't change our view on INTC being a market share donor over the next 3-5 years and we maintain Underperform on INTC and Buy on key competitors AMD, NVDA, and MRVL," Arya added.

Intel shares are up 0.7% during Wednesday's session.

By Sam Boughedda