10:45 AM EDT, 08/02/2024 (MT Newswires) -- Intel ( INTC ) provided a "subseasonal" H2 revenue guidance which it attributed to "more difficult end markets" and expected loss of market share to Advanced Micro Devices ( AMD ) in the personal computer and server segments, Wedbush said in a note emailed Friday.

The company said a nearly 400-basis-point drop in gross margin due to underutilization, competitive pricing and a faster transition to the Lunar Lake platform, which involved ramping up new capacity nodes in Ireland and shifting part content to Taiwan Semiconductor Manufacturing (TSM), Wedbush analyst Matt Bryson said in the note.

Wedbush also said that Intel ( INTC ) plans to reduce capital expenditures and operating expenses to improve financial efficiency amid the challenging market environment and suspended its dividend to preserve cash and redirect funds to investments and cost-cutting measures.

The accelerated shift towards Lunar and Meteor Lake platforms is expected to compress the financial impact of initial poor yields and reduce capital costs by limiting pilot programs, Wedbush said.

"[W]ith Intel ( INTC ) in the midst of massive technological transitions that necessarily investors have little insight into, we believe these questions will weigh on sentiment until Intel ( INTC ) can offer some more promising concrete signs of progress, bolstering confidence that Intel ( INTC ) is indeed executing to plan on its manufacturing and product initiatives," Bryson said.

Wedbush lowered its price target on Intel's ( INTC ) stock to $25 from $32.50, while reiterating its neutral rating.

Shares of the company were down over 29% in recent trading.

Price: 20.70, Change: -8.35, Percent Change: -28.74