Canaccord Genuity analyst Matthew Ramsay came out with a favorable report on Intel Corporation (NASDAQ:INTC), after the chip giant announced the acquisition of Altera for $54 per share valued at roughly $16.7 billion to expand opportunities in application-specific and customizable processor solutions for the Data Center and IoT markets. The analyst also maintained a Buy rating on Intel shares with a price target of $39, which implies an upside of 18% from current levels.

Ramsay wrote, “This deal was not unexpected and had been discussed in the press for weeks. While we anticipate modest near-term synergies, we believe the addition of more customizable server SKUs where customers can still contol their own algorithms could add high-margin growth potential for DCG in areas including search, analytics, and government. While the price tag appears steep, the acquisition does not change our overall bullish long-term fundamental thesis as we begin meetings with Intel management and PC supply chain participants at Computex in Taiwan today that should shed light on whether Windows 10 and new Skylake product launches can drive the more robust 2H/15 PC implied by Intel’s full-year guidance.”

Furthermore, “We maintain our bullish view on Intel fundamentals highlighted by sustained foundry advantages and strong secular momentum supporting 15%+ DCG and ~20% IoTG growth potential. While Mobile losses remain heavy, we believe Intel’s modem/SoC technology is gradually closing the gap in a quickly thinning herd of competitors with the business nearing transitions to SoFIA that should eliminate the need for costly subsidies beginning 2H/15 with underappreciated cost synergy potential in the combined Mobile/PC business.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matthew Ramsay has a total average return of 13.9% and a 78.2% success rate. Ramsay has a 10.7% average return when recommending INTC, and is ranked #358 out of 3610 analysts.