Intel reported sales and profit on Thursday afternoon that topped forecasts, helped by better pricing and demand for server chips. The world’s largest chipmaker also delivered a forecast well ahead of expectations. Doug Freedman, senior semiconductor analyst at Broadpoint AmTech, shared analysis.
“The numbers were great—we think this is a rotation for investors to look at [Intel],” Freedman told CNBC.
Freeman has a “buy" rating on the firm's shares and a price target of $29.
“People tend to look at semis for growth and they need to focus on Intel’s value and we think this stock is going to work over time,” he said.
“If you look at the multiples, it’s at a historic low and the business case is changed."
Freedman said Intel’s strong earnings results affirm his belief in stronger-than-expected demand for servers.
“We believe that a lot of the spending on the IT sector will go towards the server market, which is the highest gross margin piece of Intel’s business," he said.
"So we’re extremely bullish on the server market. We’re also very bullish on the hard drive space, the memory sector, and there are a lot of smaller power management plays that can go into the server side.”
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Freedman does not own shares of Intel.