The decline in Intel shares on the report that Apple plans to stop using the company's chips is a great buying opportunity, according to one Wall Street firm.
Stifel reiterated its buy rating for Intel shares, citing Apple's small market share in the PC industry.
Intel's stock dropped sharply on Monday after Bloomberg reported that Apple would ditch Intel chips for an in-house model on Mac computers. Its shares fell as much as 9 percent after the report and then regained ground, ending the day down 6 percent.
"The market is over reacting to Apple's announcement for using an internally developed CPU for its Mac systems as early as 2020," analyst Kevin Cassidy wrote in a note to clients entitled "Potential Apple Move Not a Major Threat to Intel" on Monday. "According to IDC, Apple had 7.3% traditional PC unit market share in 4Q17."
He recommended investors buy Intel shares on Monday's weakness.
Cassidy reaffirmed his $53 price target for Intel shares.
He estimated Apple generated only 4 percent of Intel's revenue last year and less than 1 percent of its profits.
"We do not expect any other PC manufacturers will consider designing its own CPUs," he wrote.