Intel in focus as Mizuho downgrades on continued headwinds; Gelsinger buys shares

Intel (NASDAQ:INTC) was in focus on Thursday as research firm Mizuho Securities downgraded the semiconductor giant as it expects the headwinds that are facing the company to continue. Separately, CEO Pat Gelsinger disclosed he was buying shares.

Shares were fractionally higher in premarket trading.

Despite expectations that Intel would benefit from new products in artificial intelligence and ones that would drive further traction in the PC and data center markets, Mizuho analyst Vijay Rakesh said that the company has continued to lag its peers and is losing share in all key markets. The technology gap between Intel and its peers such as Nvidia (NVDA) and AMD (AMD) has widened and it could be “challenging” to regain lost leadership, Rakesh said.

Rakesh lowered his rating on Intel to Neutral from Outperform and cut his price target to $22 from $36.

Intel’s recent announcements that it would let go 15% of its workforce and stop paying a dividend may impact both employee morale and execution and investor support, Rakesh added.

Separately on Thursday, Gelsinger disclosed that his family trust purchased additional shares of Intel. Intel shares have lost 44% of their value over the past month and are down more than 60% year-to-date.

Analysts are largely bullish on Intel (INTC). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a HOLD. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates INTC a HOLD.