Intel's (INTC.US) Q3 results beat expectations but fail to quell Wall Street's concerns, analysts remain cautious on the long-term outlook

Intel (INTC.US) reported better-than-expected Q3 results and guidance on Friday, but some Wall Street analysts remain skeptical about whether the company has turned the corner.

Blayne Curtis of Jefferies believes that while Intel's revenue and gross margin appear better than expected, the revenue growth in Q4 will mainly come from the PC client segment, which may intensify competition.

Curtis wrote in a note to clients: "We estimate total CPU shipments (including Intel, AMD, and ARM) in 2024 to be 292mn units, while the market expects around 270mn units. We now expect a normal seasonal decline in shipments in Q1 2025, but our AMD shipment forecast may also face more risk."

Curtis rates Intel "Hold" with a target price of $23, expecting Intel to face problems in upgrading 3nm and 18A foundry processes, needing to provide "acceptable yield and cost."

Joseph Moore of Morgan Stanley also shares a similar view, believing that the market's expectations for Intel are already low, and the company's performance is just average. Moore maintains his "Hold" rating and slightly tweaks the target price to $25.58.

He notes that Intel said it will streamline and prioritize its leadership in the x86 segment, which is key to creating value, but details on government policy, AI accelerators, and foundry business are scarce, which still worries the market.

Mark Lipacis of Evercore ISI is relatively optimistic but also advises caution.

He praises Intel's commitment to raise its operating expenses to $17.5bn in 2025 and further cut operating expenses in 2026. Lipacis believes Intel is executing its transistor roadmap and plans to achieve a material capacity upgrade of its leading 18A transistor node in 2026.

However, he also points out that to realize foundry opportunities, the ecosystem needs further maturity, which is a long process. Lipacis maintains a "Hold" rating and raises the target price to $26.

Overall, while analysts generally recognize Intel's short-term performance amid different views on its future from Wall Street, they remain cautious about its long-term strategy and market competitiveness. Despite analysts' upgrades in ratings and target prices, they generally advise investors to stay on the sidelines, waiting for more news on the implementation of 18A technology and foundry partnerships.