Wall Street is regaining interest in Intel stock.

Analysts Weigh In on Intel Stock

Intel’s stock hasn’t been very popular among Wall Street analysts, particularly after a rough few years. Although, recently, some analysts have revised their ratings upward, likely due to last year’s surge in stock prices and some promising developments in specific areas of the business.

Interestingly, there’s growing confidence regarding the demand for server CPUs and the potential of Intel’s foundry sector. These factors are driving a slight shift in sentiment among analysts.

Most analysts still don’t harbor strong optimism for Intel, and it’s pretty clear why. The company has faced numerous challenges, especially in manufacturing. Delays can quickly put them behind competitors like TSMC, giving those rivals an edge in producing CPUs for PCs or servers, while companies like AMD continue to gain market share.

Recent developments have injected some hope into Intel’s prospects. Talks with the US government and capital infusions have led to speculation about collaborations with big names like Apple, which might consider using Intel for some chip manufacturing. Just this week, KeyBank analysts moved to a “buy” rating, raising their price target to $60, and it seems others are starting to rethink their positions too.

CitiGroup analyst Atif Malik adjusted his rating from “sell” to “hold,” setting a price target just over $50. However, his outlook is more cautious compared to KeyBank’s view. Malik does see potential for Intel in the foundry market, pointing out a few key factors. First, TSMC lacks advanced packaging capabilities, which could benefit Intel. Second, U.S. government investments might incentivize companies to consider Intel for manufacturing needs. Lastly, custom AI chip designs that TSMC can’t accommodate may push companies towards Intel.

Intel’s 18A process is now entering mass production, with the Panther Lake chips expected to be in laptops soon. KeyBank suggests that yields for the 18A process are improving, which could attract chip designers looking for manufacturing solutions.

Malik believes Intel Foundry is well-positioned to cater to the booming AI market, as companies like Alphabet, Amazon, and Microsoft are designing custom AI chips. The growing demand for AI inference capabilities may enhance the importance of Intel Foundry in this space.

That said, Malik’s hesitation about giving a “buy” rating stems from his more negative view on Intel’s CPU market. The Panther Lake chip has generated buzz, but it appears unlikely to be utilized in desktop PCs. Intel’s Arrow Lake series might struggle to compete until the next-gen Nova Lake debuts in late 2026.

There are also concerns regarding the gaming performance of Arrow Lake, which hasn’t been impressive. Coupled with rising memory chip prices, this could dampen overall PC demand. Memory is being diverted to serve AI data centers, potentially making Intel’s reentry into the CPU business more challenging this year.

Despite Malik’s cautious perspective, it’s hard not to notice a shift in how Wall Street is beginning to view Intel after a long period of lackluster results. If positive developments in the foundry sector occur this year, Intel could see its stock value rise significantly, possibly becoming a formidable player in the foundry industry in the long term.