Barclays Investment Bank lowered the rating on Intel (NASDAQ: INTC) shares from overweight to equal weight, citing increased uncertainty in Intel’s leadership in the semiconductor industry, on Monday.
"We see risk of moderation in PC/server end markets, which have already outperformed, while the storyline is hampered by much uncertainty remaining around competition, process nodes/roadmaps, as well as the new CEO," said Barclays analyst Blayne Curtis. "Intel continues to believe that it can retain a performance advantage even with a process node disadvantage, but has provided little evidence to support this, creating an overhang well into 2019."
Following the downgrade from Barclays, Intel shares fell 1.2% Monday. Shares are up 6.9% since the beginning of the year through Friday. Curtis lowered his price target for Intel shares to USD 53 from USD 62.
The Investment Bank stressed the need for Intel’s next generation of chips will outperform those produced by AMD. Last month, Intel announced that its newest 10 nanometer chips will be released holiday 2019, while AMD is set to launch their 7 nanometer chips later this year. Smaller chips have historically allowed companies to create better chips that are more power-efficient and faster.