Seeing more red flags ahead for PCs and semiconductors, Citi is out with a negative note on Intel (NASDAQ:INTC) that maintains a Neutral rating and $65 price target.
The firm cites data points showing May notebook shipments were down 5% on the month and 10% lower than Citi's expectations, the second sequential month of poor notebook performance.
Citi notes that the notebook weakness is being blamed on supply chain shortages, which the firm finds hard to believe given that both Intel and AMD are ramping production.
Notebook analyst Carrie Liu lowers the firm's Q2 notebook shipment estimate from 7% growth on the quarter to 2% growth, below the seasonal average of 8%. Q3 growth is forecast at mid-single digit Q/Q growth, below the high-single digit seasonality due to component shortages.
Intel shares are currently up slightly to $57.40.
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