Standpoint Research downgraded chip maker Intel (INTC) to 'hold' from 'buy' on valuation concerns.

Analyst Ronnie Moas said: Intel shares are up 22.51 percent for us in three months and +1126 bps versus the S&P-500. I can still see the shares grinding higher to $24-$28 in 2011-2012, but it is unlikely we will see additional out-performance versus the S&P from this point forward and that is our main concern with any mega-cap, low-beta name in a rising market.

If Intel continues to rise from here but under-performs a rising market, then this will prove to be a timely downgrade, Moas wrote in a note to clients.

Yesterday, President Obama announced an extension of tax cuts and the analyst said this could trigger a 4 percent to 8 percent year-end rally.

We recommend to clients who are holding low-beta portfolios to drop a couple of low-beta names / add a couple of high-beta names if you can't afford to see this rally continue, Moas wrote.

However, he said Intel remains attractive at 11 times estimates for 2011 with a 2.8 percent dividend yield.

That being said, all we were looking for here was a capture of the market over-reaction (20 percent) sell-off in this name (Intel) from August, the analyst said.

Moas feels Intel is still suitable for those who are under-weight tech and or with a high beta portfolio as there may be less downside risk with Intel if the market reverses and heads lower.

Shares of Intel were up 8 cents at $21.78 on Nasdaq at 11.10 am EST.