Intel initiated with Hold rating at Loop Capital

Loop Capital began coverage of Intel (NASDAQ:INTC) with a Hold rating and a $25 price target.

Analysts led by Gary Mobley said it is difficult for them to be more constructive with their rating and price target for Intel.

“The catch-22 situation for Intel Corp is obvious,” said the analysts, noting that Taiwan Semiconductor Manufacturing’s (TSM) advanced-node manufacturing is better, and for Intel Products to become more competitive with Advanced Micro Devices (AMD), Nvidia (NVDA) and the Arm (ARM) community, TSM is the obvious manufacturing partner for Intel Products’ future compute tiles.

However, the analysts added that if Intel Foundry cannot rely on the volume from Intel Products, the company as a whole will struggle to cover fixed costs.

In addition, with seemingly limited options to detach, or de-consolidate, Intel Foundry, the Foundry business may be a headwind for Intel Products, according to the analysts.

“Should the Intel Corp story shift away from “Foundry 2.0″, or detaches Foundry from Intel Corp, we may become more constructive with our rating,” said Mobley and his team.