The upgrade came at a time when the chipmaker needed it the most, considering the deepening slowdown in the semiconductor industry
The analyst also factored in Intel’s inventory position that is much better compared to its peers. The stable demand in the traditional markets, combined with the company’s impressive scale, will help it emerge from the lows seen last year when chipmakers faced multiple challenges including competition and unfavorable macroeconomic conditions in the global market.
However, it is estimated that the cyclical nature of the semiconductor industry and the trade tension between Washington and Beijing might remain a drag on both the sector and the company. To Intel’s advantage, it is better positioned to face the headwinds in an increasingly volatile market. It is expected that things will change for the better once the company finally finds a new chief executive officer to succeed Brian Krzanich who resigned last year.
The descent of Intel’s stock from the 10-year high it achieved a few months ago continued so far this year. However, the shares opened Friday’s session sharply higher and maintained the uptrend throughout the day. With an average intra-day gain of about 6%, the stock traded slightly above the levels seen twelve months ago.
Taking a cue from the market’s bullish view on Intel, rival chipmakers Advanced Micro Devices (AMD) and Micron (MU) gained 6% and 12% respectively Friday afternoon.