Shares of Intel were downgraded by Morgan Stanley to underweight from equal weight, citing concerns over an inventory build. The stock slumped 1.6% in premarket trade Wednesday, after rising more than 2% in Tuesday's after-hours session following the release of third-quarter results. Analyst Joseph Moore said that while Intel's results were "very solid," the disparity between unit growth of 15% and PC unit growth of about flat is worrisome, since it implies an inventory build. That suggests a heightened risk of an overbuild in the second-half of this year, leading to unit growth deceleration in the first half of next year. And with continued declines in average selling prices and pressure on gross margins, Moore sees limited upside for the stock. Moore's price target of $30 is 6.7% below where the stock closed on Tuesday. The shares have fallen 9% since closing at a 12-year high of $35.33 on Sept. 8, but are still up 24% this year, compared with a 1.6% gain in the S&P 500.
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