Here's why Citi downgraded Intel to sell

Investment Recommendation - City Research downgrades Intel's stock to "sell" from "neutral," citing limited impact from the Nvidia partnership and minimal chances of success for Intel's foundry business [1] - Analyst believes Intel should exit the money-losing foundry business, which could unlock $1 to $2 in earnings power [4] Intel's Foundry Business - Intel's efforts to make chips for other companies, especially at the leading edge, have not progressed significantly in the last 10-20 years [6] - Intel is still 2-3 years behind Taiwan Semiconductor Manufacturing (TSMC) in foundry technology and is losing billions of dollars in this endeavor [7] - The foundry business is seen as antithetical to Intel's core strength of manufacturing its own chips [8] Nvidia Partnership - Nvidia's $5 billion investment in Intel is not considered a significant amount, given Nvidia's $67 billion in cash reserves [2] - The partnership might result in $500 million to $2 billion at best for Intel, which is not enough to move the needle for a $53 billion company [4] - A significant portion of investor questions during the Intel-Nvidia conference call focused on whether the deal would lead to a foundry arrangement [9] Competitive Landscape - Intel is still behind AMD in terms of processor technology, and a better graphics chip does not necessarily improve the core processor [4]