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Key Takeways
- Intel shares tumbled Monday, extending losses after the chipmaker posted disappointing quarterly results last week and announced layoffs to cut costs.
- Goldman Sachs analysts questioned whether Intel’s cost-cutting plan will be enough to drive a recovery.
- Analysts at Baird said “formidable hurdles remain,” anticipating Intel’s cost challenges will carry into next year.
Intel (INTC) shares dropped over 6% Monday, extending losses after the chipmaker posted disappointing quarterly results last week and announced layoffs to cut costs.
In the wake of Intel’s latest results, analysts expressed doubts whether the chipmaker’s plans to trim expenses and accelerate its manufacturing ramp-up for artificial intelligence (AI) products will be enough to help the firm recover market share.
Goldman Sachs analysts said Intel’s plans to achieve around $10 billion in cost reductions, which include laying off 15% of its workforce, may not be “sufficient for a sustained recovery in the company’s competitive position.”
Meanwhile, analysts at Baird said “formidable hurdles remain,” anticipating Intel’s cost challenges will carry into next year.
Goldman Sachs analysts maintained a “sell” rating on Intel stock, and lowered their price target to $22 from $19 previously, while Baird analysts held a “neutral” rating and cut their price objective to $20 from $40.
Shares of Intel closed 6.4% lower Monday at $20.11. They’ve lost about 60% of their value since the start of the year.