Is Intel Stuck? Analyst Labels It ‘Dead Money’ in Current Form

• Christopher Rolland attributed Intel’s (INTC) Thursday’s 7% stock decline to a light second-quarter guidance, uncertainty around a potential 20% workforce reduction, and increased competition from AMD (AMD) in the PC market.
• Intel’s first-quarter data center beat was driven by AI head node sales linked to Nvidia (NVDA) GPUs, but Rolland noted this is not a standalone Intel product, while interim CEO Lip-Bu Tan aims to create a leaner, flatter organization.
• Rolland views Intel’s stock as “dead money” in its current form, suggesting a breakup into manufacturing and product divisions, with potential growth in the 18A foundry operation supported by U.S.-based hyperscalers and a pro-USA manufacturing stance.

Christopher Rolland, a senior analyst at Susquehanna, joined CNBC to discuss Intel’s (INTC) recent earnings and the market’s reaction. Rolland attributed Thursday’s 7% stock decline to multiple factors, including a lighter-than-expected second-quarter guidance and uncertainty surrounding Intel’s cost-cutting measures. The company lowered its 2026 OpEx target to $16 billion, but details on headcount reductions and structural changes remain unclear, with rumors suggesting a potential 20% workforce cut. While Intel beat first-quarter expectations, Rolland highlighted concerns such as increased competition from Advanced Micro Devices (AMD), which is gaining share in the PC market, and a pull-in of PC demand due to tariff expectations. Additionally, Intel’s data center segment benefited from AI head node sales tied to Nvidia’s GPUs, where Intel provides one CPU for every four GPUs sold, though this is not a standalone Intel product.

Addressing leadership changes, Rolland noted that interim CEO Lip-Bu Tan appears focused on creating a leaner, flatter organization by reducing management layers to improve response times, contrasting with the approach of former CEO Pat Gelsinger. When asked about his ‘Neutral’ rating on Intel’s stock, Rolland described it as “dead money” in its current form. He suggested that breaking the company into separate manufacturing and product divisions could unlock value, particularly given potential interest in Intel’s 18A foundry operation. Rolland also speculated that large hyperscalers building in the U.S., combined with a pro-USA manufacturing stance under the Trump administration, could bolster Intel’s foundry business and provide a path forward.

WallStreetPit does not provide investment advice. All rights reserved.