TLDR
- Intel (INTC) upgraded from “Sell” to “Neutral” at Citi with $50 price target after TSMC reported strong Q4 earnings.
- TSMC’s tight advanced packaging capacity creates opportunity for Intel’s foundry business to capture overflow demand.
- Intel stock jumped 139% over the past year on restructuring progress, government deals, and improving foundry competitiveness.
- Company posted Q3 profit with $13.65 billion revenue, securing partnerships with Nvidia and $8.9 billion U.S. government investment.
- Analysts remain cautious with “Hold” consensus, though some see upside potential with targets ranging from $39.62 to $60.
Intel stock received a fresh look from Wall Street analysts this week. Citi upgraded shares from “Sell” to “Neutral” with a $50 price target following Taiwan Semiconductor’s record earnings report.
Intel Corporation, INTC
The upgrade centers on TSMC’s capacity constraints in advanced packaging. Analyst Atif Malik believes Intel has a “unique window of opportunity” to attract foundry customers as rivals struggle to meet demand. U.S. government support strengthens Intel’s positioning to capture this business.
The shift marks a turning point for a stock that spent years out of favor. Intel has climbed 139% over the past 52 weeks and 107% in the last six months. Shares hit a 52-week high of $50.39 on January 15 before pulling back 6%.
New CEO Lip-Bu Tan drove the turnaround through restructuring, cost cuts, and renewed AI processor focus. The company secured $8.9 billion from the Trump administration and landed deals with Nvidia and SoftBank worth $7 billion combined.
Foundry Business Gains Traction
Malik sees three factors driving potential foundry wins. TSMC’s packaging shortage creates an immediate opening. Government investment incentivizes domestic chip production. Companies designing custom AI chips will need alternatives when TSMC capacity runs out.
Intel’s 18A process entered production with Panther Lake chips shipping in laptops this month. KeyBanc analysts estimate yields reached 60%, now improving at industry-standard rates. This proves the process node works for chip designers seeking manufacturing options.
AI ASICs present the biggest opportunity. Alphabet, Amazon, and Microsoft all design custom AI chips. As AI applications expand, demand for inference capacity could funnel business to Intel Foundry.
Intel’s Q3 results showed the recovery gaining momentum. Revenue rose 3% year-over-year to $13.65 billion, topping the $13.14 billion estimate. Non-GAAP gross profit surged 128% to $5.46 billion. Earnings per share flipped from a $0.46 loss to $0.23 profit.
CPU Business Faces Pressure
Malik’s concerns about the CPU segment prevented a “Buy” rating. Intel’s Panther Lake impressed at CES but skips desktop PCs. Arrow Lake struggles with gaming performance, and the upcoming refresh won’t fix it.
Intel faces market share losses to AMD in both PC and server segments. Qualcomm’s Arm-based chips add pressure, though compatibility issues slow adoption. Rising memory prices could dampen PC demand as chip makers shift capacity to AI data center HBM production.
Wall Street sentiment remains mixed. RBC Capital initiated coverage at “Sector Perform” with a $50 target. UBS raised its target from $40 to $49 while keeping “Neutral.” KeyBanc upgraded to “Overweight” with a Street-high $60 target on manufacturing progress. Melius Research moved to “Buy” at $50, citing potential Apple and Nvidia production wins on the 14A node in 2028-2029.
Analysts expect Q4 fiscal 2025 loss per share at $0.02. Full-year 2025 loss should narrow 84% to $0.14, improving to $0.17 earnings in fiscal 2026.
Of 43 analysts covering Intel, four rate it “Strong Buy,” one “Moderate Buy,” 33 “Hold,” one “Moderate Sell,” and four “Strong Sell.” The consensus “Hold” rating carries a mean price target of $39.62, implying 16% downside. KeyBanc’s $60 target suggests 28% upside potential.
Intel stock trades at 3.9 times sales versus the 3.5 times industry average. The company’s market capitalization stands at $224 billion.
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