Intel Corp.’s stock was downgraded to underweight from market perform at independent research firm Sanford C. Bernstein, which cited growing concerns over weakness in its datacenter business. The downgrade comes a day before the semiconductor maker reports second-quarter results. Analyst Stacy Rasgon also cut his stock price target to $25, which is 16% below current levels, from $29. He had cut his estimates on Intel last week, but maintained his market perform rating, because of a weak PC market, which Rasgon said was not overly surprising. But since then, he’s seen evidence that the datacenter market has also weakened, “which would (at this point) be significantly more damaging than the spectre of weak PCs,” Rasgon wrote in a note to clients. “We recognize the somewhat non-ideal timing, and risky nature of this [downgrade], but we see little prospect for good news…and see real potential for things to get worse,” he wrote. The stock rose 1.1% in morning trade, but was down 17% year to date, compared with the Dow Jones Industrial Average’s 1% gain.
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