INTC: Intel Stock Falls After Top Analyst Calls Nvidia Deal Overhyped

Sep 19 - Intel Corporation INTC came under pressure Friday after Citi cut its rating to Sell following the company's recently announced deal with Nvidia NVDA. Shares of Intel slipped more than 3% in morning trading.

Citi analyst Christopher Danely argued the Nvidia partnership is unlikely to fix Intel's core challenges. He noted that better graphics will not improve Intel's CPUs enough to outpace rivals like AMD, where the processor remains the key performance driver.

The analyst also downplayed expectations for Intel's AI products, estimating the total addressable market at just $1 billion to $2 billion, far smaller than what investors may be pricing in.

Danely lowered his stance on Intel to Sell from Neutral, but simultaneously lifted the price target to $29 from $24. He suggested the stock's sharp rally, up about 50% since early August, reflects investor hopes for Intel's foundry unit. Yet Citi sees minimal chance of success, given Taiwan Semiconductor TSM remains years ahead.

The downgrade highlights the market's skepticism over Intel's turnaround, even as Nvidia continues to set the pace in AI chips.