Ruisui: Upgrade Intel (INTC.US) rating to "buy" with a target price raised to $50.

Due to the recovery of the personal computer and data center market, Mizuho Securities analyst Vijay Rakesh has upgraded his stock rating for Intel (INTC.US) from "neutral" to "buy" and raised the target price from $37 to $50. The analyst believes that Intel's product roadmap for computing and data center in 2024 is better than its competitors and its other achievements under the leadership of Pat Gelsinger. Additionally, the analyst states that the personal computer and data center markets will experience an "upward cycle" in 2024. The analyst also points out that Intel may launch significant new server products in the next six months and become a foundry customer. The analyst further notes that Intel's valuation per share will increase by $17 due to the company's plan to spin off its Programmable Solutions Group (PSG) and pursue an initial public offering (IPO). The analyst also suggests that 2025 could be a "crucial transformation year" for Intel's foundry services business, implying a total implied valuation of around $84 per share. At the end of October, Intel reported better-than-expected third-quarter results and gave an optimistic outlook, driven by the recovery in the personal computer market. The financial report showed that Intel's Q3 total revenue declined 8% year-on-year to $14.2 billion, but exceeded analysts' average expectation of $13.5 billion. Adjusted earnings per share were $0.41, far exceeding the average analyst expectation of $0.20. Intel expects to resume its revenue growth trend in the fourth quarter, driven by improvement in the personal computer market and a more competitive product lineup. The company forecasts fourth-quarter revenue to reach $14.6 billion to $15.6 billion, surpassing analysts' average expectation of $14.4 billion. The adjusted earnings per share are projected to reach $0.44, exceeding the average analyst expectation of $0.31. Intel also anticipates a fourth-quarter adjusted gross margin (the remaining sales portion after deducting production costs) of 46.5%. In comparison, analysts' average expectation is 44.2%. This metric largely reflects the chip manufacturing efficiency of Intel's multi-billion-dollar chip factory network. Furthermore, as Intel upgrades its Sapphire Rapids, Emerald Rapids, and Sierra Forest chips in December, the company's data center and server business is expected to show continuous growth in the fourth quarter.