After years of struggling, Intel stock is no longer in favor with Wall Street analysts.
The stock’s surge last year and the momentum in some of its businesses led some analysts to upgrade their ratings on Intel.
Strong demand for server CPUs and the long-term potential of the foundry business are at the heart of analysts’ newfound optimism.
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Most Wall Street analysts have reported Intel(NASDAQ: INTC) People aren’t all that optimistic about the stock, and it’s not hard to see why. Intel has been dealing with multiple challenges over the years. In manufacturing, delays and mistakes lead to TSMC stay ahead and provide manufacturing advantages to Intel’s competitors. In the PC and server CPU business, AMD has been steadily gaining market share.
Investors have become more optimistic about Intel over the past year. High-profile dealings with the U.S. government NVIDIA Intel capital injection, rumors indicate apple Some of its chips may use Intel foundries. Wall Street is finally starting to catch up. Earlier this week, a KeyBanc analyst upgraded the stock to “buy” and raised the price target to $60. On Thursday, another analyst jumped on the bandwagon.
Image source: Intel.
Citigroup Analyst Atif Malik downgraded Intel’s stock from a “sell” rating to a “hold.” Malik also Set a price target of $50, just above Current stock price.
Malik is less optimistic about Intel’s prospects than KeyBanc analysts, but he believes the company has a significant chance of winning foundry business. Malick’s overall thesis consists of three parts. First, Intel should benefit from a shortage of TSMC’s advanced packaging capacity. Second, U.S. government investment incentivizes companies to consider using Intel for manufacturing. Third, companies that design customized artificial intelligence chips cannot ensure TSMC’s manufacturing capabilities and will choose Intel.
Intel’s 18A process is already in production, and Intel’s own Panther Lake chips will debut in laptops later this month. KeyBanc analysts believe that Intel’s 18A yield rate has reached about 60%, and the company noted that the yield rate is currently improving at an industry standard rate. This suggests that a successful process node should be attractive to chip designers working to ensure manufacturing capabilities.
Specifically, Malik expects AI ASICs, a specialized chip designed for AI workloads at the hardware level, to make their way into Intel foundries. Many companies, including letter, Amazonand Microsoftdesign your own custom AI chip. As AI discovers more use cases, demand for AI reasoning capabilities will likely drive a significant amount of AI chip business to Intel’s foundries.
One of the things holding Malik back from jumping to a “buy” rating is some pessimism about Intel’s CPU business. Although Intel’s Panther Lake was a splash at CES, the chip won’t make its way into desktop computers. Intel’s Arrow Lake and its upcoming Arrow Lake updates will try to suppress the desktop CPU market until the next generation of Nova Lake is launched (probably in late 2026).
Arrow Lake has some issues with poor gaming performance, and refreshing doesn’t fix them. Malik worries Intel will continue to lose CPU market share to AMD and armBased on the device. Qualcomm The company has been tapping into the PC CPU market with Arm-based chips, although compatibility issues have slowed adoption.
Malik noted that in addition to potential market share losses, rising memory chip prices could hurt overall demand for PCs. AI data centers consume an incredible amount of memory chips, and memory chip manufacturers have shifted capacity to HBM for AI accelerators. Rising PC prices may temporarily shrink PC sales, making Intel’s recovery in the PC business more difficult this year.
While Malik’s view is more balanced than that of KeyBanc analysts, Intel and its comeback story are clearly starting to win over Wall Street after years of disappointing results. Some positive foundry news this year could push Intel stock well above Citigroup’s $50 price target, giving the company the potential to become a major player in the foundry industry over the long term.
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Citigroup is an advertising partner of Motley Fool Money. Timothy Green works at Intel. The Motley Fool owns and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Intel, Microsoft, Nvidia, Qualcomm and TSMC. The Motley Fool recommends the following options: Long January 2026 Microsoft calls at $395 and short January 2026 Microsoft calls at $405. The Motley Fool has a disclosure policy.
Wall Street Is Starting to Love Intel Stock Again Originally Posted by The Motley Fool
