Analyst Warns Intel Valuation 'Doesn't Make Sense,' Suggests NVIDIA, AMD, Micron, Broadcom

Gil Luria, head of technology research at D.A. Davidson, appeared on CNBC's "Closing Bell Overtime" to warn that Intel's (INTC) current valuation does not make sense given the massive rally in semiconductor stocks. He noted that both major semiconductor ETFs are up more than 80% this year, while memory names have surged 300% or more, creating a valuation contradiction investors should not ignore.

Recommendation Change

Luria did not issue a specific rating change for Intel, but he criticized its valuation as "illogical" compared to peers. Instead, he suggested looking at NVIDIA (NVDA), AMD (AMD), Micron (MU), and Broadcom (AVGO) as more attractive alternatives.

Analyst's Rationale

Luria believes the market has overvalued Intel relative to its actual performance, especially given fierce competition from NVIDIA and AMD in AI and high-performance computing. He added that memory companies like Micron have benefited from rising demand for memory in AI applications, making their valuations more justified.

Context

The comments come amid an unprecedented semiconductor boom, with NVIDIA shares up over 200% in the past year, while AMD and Broadcom have also doubled. In contrast, Intel (INTC) has underperformed, rising only about 30% over the same period. Other analysts, such as Hans Mosesmann of Rosenblatt Securities, hold a more neutral view on Intel, citing challenges in its strategic turnaround.

What to Make of It

Luria's view reflects growing concern among analysts about Intel's valuation amid intense competition. While the alternatives he suggested may be more attractive near term, investors should evaluate each company's risks and opportunities based on individual fundamentals.