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Intel under pressure: Nvidia invests billions, analyst warns of sales risk!
Citigroup downgrades Intel due to financial concerns, while Nvidia invests $5 billion. The challenges remain.
Intel under pressure: Nvidia invests billions, analyst warns of sales risk!
In a surprise move, Citigroup analyst Christopher Danely downgraded Intel (INTC) stock to "sell" from "neutral." This decision came on October 9, 2025, despite the significant investment from Nvidia (NVDA), which recently acquired a $5 billion stake in Intel. However, the analyst expresses significant concerns about Intel's financial situation and in particular its "loss-making" foundry division, which handles chip production for other companies.
Danely points out that the agreement between Nvidia and Intel did not include any commitments regarding Foundry services. This could put Intel in an even more difficult position as the company remains two to three years behind the Taiwanese semiconductor industry, according to Danely. So the difficulties Intel has faced improving its foundry businesses over the past two decades appear to be continuing.
Focus on internal production
When discussing Intel's strategic direction, Danely suggests that the company should focus more on its own processor production instead of making chips for others. This could help strengthen Intel's core competencies and move away from the current foundry model, which is not in line with the company's capabilities.
Investors on the stock market reacted negatively to the news. Intel shares closed at $29.58, down over 3% on the trading day. In contrast, Nvidia saw a slight increase, closing at $176.67.
Danely's assessments represent a significant turn in the discussion about Intel's future, particularly in the context of current market movements and the strategic decisions of leading companies in the semiconductor sector. The challenges Intel faces are considered crucial to the development of its business strategies in the coming years.
Analysts and investors will continue to closely monitor developments surrounding Intel and Nvidia, particularly with regard to the impact of Nvidia's investment and Intel's response to the critical reviews. Intel's next moves could be crucial to whether or not the company can gain the upper hand in the competitive chip industry.