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Intel’s stock sheds a bear as a key catalyst awaits

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Intel Corp.’s bear camp got a little smaller Friday as a BofA Securities analyst ended his negative call on the stock.

BofA’s Vivek Arya still has concerns about Intel
INTC,
+2.17%
,
including that there’s limited upside in the PC market and that the company is shedding server market share to Advanced Micro Devices Inc.
AMD,
+0.83%

and ARM Holdings PLC
ARM,
+0.42%
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But he’s feeling more encouraged about other areas of the business, including its Mobileye autonomous-driving unit and its foundry plans.

See also: Intel announces new PC, server chips designed for AI uses

What’s more, Arya thinks that Intel is undervalued on a sum-of-the-parts basis. That could change as the company moves to separate its design and manufacturing financials early next year.

“This should help compare each business unit to its respective [comparables],” he noted.

Additionally, Intel has signaled an interest in spinning off its field-programmable gate-array business into a separate public company, “potentially gearing up the stock for a revaluation on a sum-of-the-parts basis,” Arya said.

He upgraded the stock to neutral from underperform in his latest note, while lifting his price objective to $50 from $32.

Arya also changed his thinking on shares of AMD, boosting his rating to buy from neutral and upping his price objective to $165 from $135.

“We view AMD as well-positioned to gain incremental share of the hugely profitable $100 billion-plus accelerator market while continuing to make progress in server [central processing units] against incumbent [Intel],” he wrote.

Nvidia Corp.’s stock
NVDA,
+1.12%

is still his preferred way to play compute and artificial-intelligence trends, but Arya said that AI and generative AI “are multi-year phenomena and represent opportunities for many.”

Read: Could Nvidia’s stock — up 231% this year — actually be a bargain?

AMD shares were up 0.6% late in Friday’s session, while Intel’s stock was ahead 1.9%.

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