Why this analyst still isn’t sold on Intel stock

Roth analyst Suji Desilva raised his 12-month price target to US$50.00 from US$40.00 on Intel Corporation (Intel Corporation Stock Quote, Chart, News, Analysts, Financials NASDAQ:INTC) while maintaining a “Neutral” rating, citing strong AI-driven data center demand offset by near-term manufacturing constraints and margin pressure.

In a Jan. 22 earnings analysis, Roth Capital Markets analyst Desilva said Intel delivered better-than-expected fourth-quarter results, led by accelerating demand for AI data center CPUs, but guided to seasonally weaker first-quarter revenue and lower margins as capacity limitations and yield challenges weigh on output.

Roth analyst Suji Desilva maintained a “Neutral” rating, citing strong AI-driven data center demand offset by near-term manufacturing constraints and margin pressure…

Intel reported Q4 2025 revenue of US$13.7-billion, up 0.2% quarter over quarter but down 4% year over year, ahead of consensus expectations of US$13.4-billion. The Data Center and AI (DCAI) segment was the standout, with revenue up 16% quarter over quarter, reflecting stronger-than-expected AI data center demand. Client Computing Group revenue declined 4% quarter over quarter, as customers awaited the launch of newer Panther Lake processors expected to support a premium notebook refresh cycle in coming quarters. Intel Foundry revenue increased 7% quarter over quarter, driven by progress in existing advanced packaging programs.

Gross margin improved to 37.9%, though still down 210 basis points sequentially, reflecting the ramp of newer Intel 18A products and greater use of lower-margin external foundry capacity. Earnings per share of US$0.15 exceeded expectations, supported by stronger revenue and margins.

Desilva said Intel’s Q1 2026 revenue guidance of US$12.2-billion to US$13.2-billion implies a 3% to 11% sequential decline, broadly in line with typical seasonality but slightly below consensus on an absolute dollar basis due to manufacturing constraints. He said that year-over-year comparisons are also affected by the divestiture of Altera. Management indicated that data center revenue would have exceeded seasonal trends if additional capacity were available.

Intel guided to Q1 gross margin of 34.5%, down 340 basis points quarter over quarter, reflecting lower volumes and the accelerating ramp of newer, initially lower-margin Intel 18A products. Desilva expects product availability to improve as yields on key nodes increase over the coming quarters.

Despite near-term headwinds, he said Intel’s strong x86 server CPU position should support growth through the balance of calendar 2026, as AI infrastructure spending increasingly relies on CPUs alongside GPUs. He also sees intermediate-term upside from new client processor launches and improving traction in Intel’s foundry and advanced packaging businesses, supporting the higher valuation framework but not yet warranting a more bullish rating.

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