Bank of America analyst Vivek Arya anticipates Intel will report in-line or better fourth-quarter results. The firm forecasts sales of $13.4 billion and gross margins of 36.5%. BofA bases this positive short-term outlook on strong server sales, which are expected to counterbalance the impact of rising memory prices on the PC market.
Despite the optimistic view on upcoming earnings, Bank of America reiterated its "underperform" rating for Intel stock. The firm maintained a price target of $40.
The firm highlighted several long-term risks justifying the rating. These include challenges with the production ramp-up of the new 18A and 14A chip nodes and a lack of significant external foundry customers. Further concerns involve weakness in the mature PC market and increasing competition.