Investment from NVIDIA Corporation triggered a rise in the stock price of Intel Corporation (INTC.US), but Citigroup remains bearish, citing behind-the-times manufacturing and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR already seeing the benefits priced in.

Citigroup released a research report, downgrading Intel Corporation (INTC.US) from "Neutral" to "Sell", but raising the target price from $24 to $29. Previously, after NVIDIA Corporation (NVDA.US) announced a $5 billion investment, Intel Corporation's stock price rose 23% on Thursday to $30.57. Citigroup analyst Christopher Danely stated, "We do not expect a significant improvement in Intel Corporation's performance, as a stronger graphics card does not make Intel Corporation's CPU superior to AMD, as processors are the main factor determining performance. In addition, considering a small potential market size ($1 billion to $2 billion), we do not have high expectations for its artificial intelligence products. We also believe that the company's stock price already reflects the expected success in the leading foundry business, but we think the likelihood of this business being successful is very slim." Furthermore, given that Intel Corporation's stock price has risen by about 50% since early August, Danely stated that investors have likely already digested the expectations for Intel Corporation's foundry trade. Danely added, "We believe Intel Corporation's foundry business is lagging behind Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR by several years." It is reported that earlier this week, NVIDIA Corporation announced that it has agreed to invest $5 billion in competitor Intel Corporation, and the two companies will jointly develop chips for personal computers (PC) and data centers, which will help Intel Corporation address current operational challenges. NVIDIA Corporation will acquire Intel Corporation common stock at a price of $23.28 per share.