Wall Street analysts covering Intel have shown renewed interest in the stock this week, with two major firms adjusting their ratings. On Thursday, Citigroup analyst Atif Malik upgraded Intel from "sell" to "hold," setting a price target of $50. Earlier in the week, a KeyBanc analyst raised the stock to "buy" with a $60 target.
Malik pointed to Intel's foundry segment as a key opportunity. He cited three factors: a shortage of advanced packaging capacity at TSMC, U.S. government investments incentivizing companies to use Intel, and companies designing custom AI chips seeking alternatives to TSMC. The Intel 18A process is now in production, with Panther Lake chips set to debut in laptops later this month. The KeyBanc analyst reported yields around 60% for Intel 18A, noting improvements at industry-standard rates.
Malik specifically mentioned AI ASICs, specialized chips for AI workloads, as potential business for Intel Foundry. Companies like Alphabet, Amazon, and Microsoft design custom AI chips, and increasing AI use cases could drive demand to Intel. However, Malik expressed caution about Intel's CPU business. While Panther Lake impressed at CES, it won't be available for desktop PCs. Arrow Lake and its refresh will handle the desktop market until Nova Lake launches, likely in late 2026.
Malik noted issues with Arrow Lake, including lackluster gaming performance, and worries about Intel losing CPU market share to AMD and Arm-based devices. Qualcomm has been pushing Arm-based PC chips, though compatibility issues have slowed adoption. Rising memory chip prices, driven by AI data center demand, could also hurt PC sales and make Intel's PC comeback more difficult this year.
Investors grew more optimistic about Intel over the past year, fueled by high-profile deals with the U.S. government and Nvidia, and rumors of Apple potentially using Intel Foundry. Intel has faced years of challenges, with TSMC pulling ahead in manufacturing and AMD gaining CPU market share. Despite risks, the recent analyst moves signal a shift on Wall Street after disappointing results.