Intel’s long-term growth prospects, based on what it showed at the Mobile World Congress (MWC), appear positive, but analysts at Canaccord Genuity are concerned about the PC market’s decline. As a result, the research firm trimmed its near-term estimates and price target for the chip maker. On Tuesday, Intel closed up 2.64% at $30.37.

Intel Corporation Price Target Trimmed But Buy Rating Maintained

Intel impresses all at MWC

Last week in Barcelona, Intel impressed all with its technology, suggesting robust growth for its Data Center Group, Internet of Things (IoT), and Memory businesses. This makes analysts optimistic on the chip maker’s long-term potential, but for the relative short-term, they have lowered their price target on the stock from $39 to $38 owing to near-term pressures from the declining PC market.

The Canaccord analysts chatted with several players involved in the wireless supply chain and learned that Intel has taken significant strides in its modem portfolio, including its XMM 7480 carrier-aggregation modem and 14-nanometer XMM 7360 modem for LTE-enabled smartphones/tablets.

At the event, Intel also announced a partnership with AT&T for testing unmanned aerial vehicles using a mobile network. For this, the duo plans to use LTE networks, which not only broadens UAV’s flight range but also opens up plenty of other options for extending its applications across the IoT.

Some near-term headwinds

However, Canaccord analysts see some near-term downside to these prospects. Owing to the current monetization of 4G products, 5G technologies are unlikely to gain popularity until 2018. Thus, Canaccord believes Intel’s core server business will continue to be its primary growth driver near-term.

Despite improving prospects for LTE, the analysts noted that Apple is the only tech firm expected to buy Intel’s baseband processors. However, they doubt if Apple will prefer Intel, as rival Qualcomm is expected to give tough competition in the premium-handset market.

In addition, the saturated PC market and slowing spending in China caused Canaccord analysts to lower their PC revenue estimates for 2016, from an expected drop of 1.3% year over year to a 2.6% declines YoY. Their non-GAAP earnings per share estimate has also been trimmed to $2.41 from $2.45 per share for 2016.

Nevertheless, Canaccord is impressed with Intel’s long-term differentiated product offerings. Therefore, despite lowering their price target, they have maintained their Buy rating on the chip maker.