Not a good few days for Intel.
The downgrade to neutral from buy follows the resignation last week of CEO Brian Krzanich, who stepped down after news broke that he had a "consensual previous relationship" with an Intel employee. The company has a strict non-fraternization policy.
Shah cited the lack of leadership at Intel as a reason for the downgrade. He also reduced his price target on the stock to $55 from $60. In morning trading on Monday, Intel was down more than 2.4% to $51.26.
TheStreet's Annie Gaus reported last week that Krzanich's sudden exit followed closely on the heels of a string of unflattering events for the company and its chief this year.
In January, the chipmaker was rocked by the discovery of two widespread vulnerabilities in its chips, which affected nearly all devices using Intel chips. (The same vulnerabilities affected chips made by Advanced Micro Devices Inc. (AMD) - Get Report and Softbank-owned ARM, to some degree). Since then, Intel has run into manufacturing trouble and delays with its forthcoming 10nm FinFET chips.
While Krzanich ushered in an era of growing revenue and widening margins in Intel's core businesses in his five years at the helm, he's also blamed for squandering advantages in data center processing and missing the boat on AI and machine learning, which have allowed rivals AMD and Nvidia to gain ground. And as Nvidia has successfully evolved from a dominant graphics card provider to an AI-first business serving new markets like autonomous cars, Intel has been left to play catch-up.
Intel shares have risen 14% year to date, while Nvidia has gained 30%.