Intel (INTC) could beat Q1 estimates and at least meet, or guide above, Q2 forecasts as CPU demand stays firm and interest in packaging and foundry work builds, but the stock is already overvalued, Wedbush said in a note Monday.
Recent positive sentiment has come from expected EMIB packaging wins, possible 18A foundry progress and stronger CPU demand linked to AI inference needs, the investment firm said.
Intel's Q1 guidance looked cautious, especially on margins, but stronger server compute demand and price increases should support results coming in modestly above expectations, and momentum could carry into Q2, which may give Intel room to issue better guidance than current Wall Street forecasts, Wedbush said.
The current valuation looks hard to support because Intel's process technology still needs to prove it can compete, as demand for PC compute may weaken over the next few quarters.
Wedbush kept its neutral rating and $30 price target for Intel, adding that server CPUs do not appear to be the main supply limit for the industry; however, memory and other parts remain tighter, which also tempers the long-term upside case.
Price: $65.67, Change: $-2.83, Percent Change: -4.13%