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Intel (NASDAQ:INTC), which is still heavily reliant on the PC and notebook spaces to generate revenue, is seeing a “red flag” as January notebook shipments fell drastically, largely due to supply constraints, Citi said in a note to investors.
Analyst Christopher Danely, who has a neutral rating and a $55 price target, pointed out that January notebook shipments fell 24% month-over-month, larger than the 16% decline the firm was expecting.
As such, the firm’s Taiwan notebook analyst lowered their notebook shipment forecast for the first quarter to down 16% quarter-over-quarter, but still above the 20% decline it has experienced previously, largely due to component supply tightness.
“We see this as another red flag after Intel stated it sees an inventory correction in the notebook end market during its last earnings call,” Danely wrote in the note. “We believe PC sales will cool off in C22 due to a reversion to the mean after two straight years of double digit growth and as such we reiterate our Neutral rating on INTC.”
Intel shares were higher in premarket trading, gaining slightly more than 1.5% to $48.34.
On Tuesday, Intel said it was acquiring Tower Semiconductor (NASDAQ:TSEM) for $53 per share in cash, valuing the Israeli-based semiconductor company at $5.4 billion.
It will integrate the company into its Intel Foundry Services unit to become a fully integrated foundry business.
