4 days ago
Intel Rallies Despite Fitch Downgrade
Intel (NASDAQ:INTC) got a surprise downgrade from Fitch this week, yet its stock popped about 3.6% anyway. The agency dialed down Intel's long-term credit rating from BBB+ to BBB, pointing to a tougher demand backdrop and the need for debt reduction and stronger product ramps over the next year or two. Short-term ratings stayed at F2, so it's not all doom and gloom.
Warning! GuruFocus has detected 6 Warning Signs with INTC.
At the same time, Intel's next-gen 18A process is acting up. Early reports suggest Panther Lake chips have roughly three times the defect rate they should, and volume ramps are lagging. That's a headache so close to the planned Q4 launch, especially when smooth ramp-up was supposed to prove we're past the worst of manufacturing woes.
Still, investors seem to be looking past the short-term noise. Maybe a rebound in PC and data-center spendingor a clean bill of health at the August 12 bond covenant updatewill do the trick. The real verdict, though, will come with Q3 production progress and any signs that Panther Lake irons out its kinks.
This article first appeared on GuruFocus.
