Analysts see hope in Intel's earnings but remain wary of structural issues

Intel reported stronger-than-expected results for the 2nd 4th connected Thursday evening, beating connected the apical and bottommost lines. It was a invited glimmer of anticipation for analysts and investors, arsenic the institution struggled successful the preceding quarters to wide inventory and retool for A.I.-centric, GPU-heavy firm spend.

Shares of Intel were up astir 6% successful premarket trading connected Friday.

Wall Street analysts mostly cheered the results, driven successful ample portion by PC sales, but cautioned that the institution had larger issues that would connection important headwinds.

"Good results," Citi expert Christopher Danely said successful a Friday note, "but structural issues remain." Citi reiterated a neutral standing and a $34 terms target.

"We expected spending connected Nvidia GPUs to travel astatine the disbursal of Intel and AMD CPUs, and Intel stated the information halfway marketplace volition beryllium anemic for a while. In addition, Intel continues to pursuit maturation successful markets wherever we deliberation it volition not succeed, specified arsenic foundry and graphics," Danely wrote.

Deutsche Bank, which described Intel's numbers arsenic "more than marginal," maintained its Hold standing but accrued its terms people from $32 to $38, citing "abated" inventory challenges. But the institution volition apt look continued pressures with firm spending shifting towards A.I., Deutsche Bank expert Ross Seymore said.

JPMorgan, meanwhile, maintained an Underweight standing connected the stock, the equivalent of a Sell. Analysts accrued Intel's terms people from $30 to $35 and lauded the company's "better-than-expected results. But, JPMorgan noted, portion continued execution betterment was a affirmative sign, improving accumulation and shipments of server- and client-side products would beryllium the adjacent challenge.

Intel CEO Pat Gelsinger said connected a telephone with analysts the institution inactive sees "persistent weakness" successful each segments of its concern done year-end, and that server spot income won't retrieve until the 4th quarter. He besides said that unreality companies were focusing much connected securing graphics processors for artificial quality alternatively of Intel's cardinal processors.

CNBC's Kif Leswing and Michael Bloom contributed to this report.