Intel: BofA skeptical about Qualcomm buyout

(CercleFinance.com) - Bank of America on Monday renewed its 'underperform' rating and $21 target price for Intel shares, following press reports over the weekend of a possible takeover of the processor manufacturer by Qualcomm.


In a reaction note, the broker admits to being intrigued by such a project, which it believes would have the merit of creating a giant with annual sales of $90bn, leading status in the mobile, PC and server markets, and a large industrial footprint thanks to Intel's production facilities.

However, BofA believes that these potential advantages would be more than outweighed by the disadvantages of the deal, i.e. difficulties in gaining regulatory approval, Intel's current financial woes and Qualcomm's well-established relationship with TSMC, which would complicate a tie-up with Intel's technology architecture.

From his point of view, such a merger would create confusion and potential turmoil, which would be to the advantage of AMD, Nvidia or Arm, who would take advantage of it to take more market share from Intel.


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