Intel board update, AWS deal ‘incremental positives,’ says Evercore ISI

After Intel (INTC) published a letter to employees outlining decisions from its recent board of directors meeting and announced it expanded its collaboration with AWS (AMZN) to manufacture an AI fabric chip on the 18A process, Evercore ISI views the developments as “incremental positives,” but maintains an In-Line rating and $25 price target on Intel shares until there is increased visibility into success of its foundry business. Intel plans to establish IFS as an independent subsidiary, which Evercore views as a positive as it increases transparency of Intel’s manufacturing business, and enables accountability, benchmarking to best practices and a focus on execution. The company also said it plans to increase capital efficiency, with a focus on capacity in Ireland, Arizona, Oregon, New Mexico and Ohio, and completing its advanced packaging fab in Malaysia; plans a focus on x86, including AI PCs and the data center; and noted that it is halfway to its 15,000 person reduction-in-force goal.