Intel (INTC) Stock: Chip Maker Gets Upgrade as TSMC Capacity Constraints Creates Opportunity

TLDR

• Citi analysts upgraded Intel (INTC) from “Sell” to “Neutral” with a $50 price target following Taiwan Semiconductor’s strong earnings report.
• Intel could benefit from TSMC’s tight advanced packaging capacity and has a “unique window of opportunity” to attract foundry customers with U.S. government support.
• Intel stock has surged 139% over the past year and 107% over the past six months, reaching a 52-week high of $50.39 on January 15.
• The company turned profitable in Q3 2025 with revenue of $13.65 billion, beating analyst estimates, and secured major deals including $8.9 billion from the U.S. government.
• Wall Street maintains a “Hold” consensus rating with a mean price target of $39.62, though some analysts see potential upside with KeyBanc’s Street-high target of $60.

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Taiwan Semiconductor reported record-breaking fourth-quarter earnings last week, with profit jumping 35% to beat analyst estimates. The news sent TSM stock higher, but it also created unexpected momentum for Intel.

Intel Corporation, INTC

Citi analysts upgraded Intel stock from “Sell” to “Neutral” and set a $50 price target. Analyst Atif Malik pointed to TSMC’s tightness in advanced packaging as a key factor. This constraint should benefit Intel as the company positions itself to capture overflow demand.

Intel has a “unique window of opportunity” to attract foundry wafer customers, Malik noted. The U.S. government’s investment in the company creates an incentive for chip designers to consider Intel for manufacturing.

The upgrade marks a shift in Wall Street’s view of Intel after years of struggles. Intel has faced challenges in manufacturing, with delays allowing TSMC to pull ahead and giving Intel’s competitors an advantage. In the CPU market, AMD has been consistently gaining market share in both PC and server segments.

But momentum has started building for Intel over the past year. The stock has gained 139% over the past 52 weeks and 107% over the past six months. Intel reached a 52-week high of $50.39 on January 15, though the stock has pulled back 6% from that level.

New leadership under CEO Lip-Bu Tan has driven restructuring, cost cuts, and a renewed focus on AI processors. The company landed a major deal with the Trump administration, which invested $8.9 billion in Intel’s common stock.

Foundry Business Creates Growth Path

Malik sees three components driving potential foundry wins for Intel. First, the shortage of advanced packaging capacity at TSMC creates an opening. Second, government investment creates incentives for companies to use Intel. Third, companies designing custom AI chips unable to secure TSMC capacity will turn to Intel instead.

Intel’s 18A process is now in production. The company’s Panther Lake chips are set to debut in laptops shipping this month. KeyBanc analysts believe Intel has reached yields of around 60% for the 18A process, with yields now improving at industry-standard rates.

This progress points to a viable process node that should appeal to chip designers struggling to secure manufacturing capacity elsewhere. Malik expects AI ASICs, specialized chips designed for AI workloads, to find their way to Intel Foundry.

Many companies including Alphabet, Amazon, and Microsoft design custom AI chips. As AI use cases expand, demand for AI inference capacity could drive business to Intel Foundry.

Intel turned profitable in the third quarter of fiscal 2025. Revenue increased 3% year-over-year to $13.65 billion, beating the $13.14 billion analysts expected. This showed demand for Intel’s core x86 platform had recovered.

CPU Business Faces Headwinds

The third-quarter results showed wide-reaching effects for profitability. Non-GAAP gross profit increased 128% annually to $5.46 billion. Adjusted earnings per share posted a turnaround, improving from a loss of $0.46 to EPS of $0.23.

Intel highlighted partnerships with Nvidia to develop multiple generations of custom data center and PC products. The deal included a $5 billion equity stake in Intel bought by Nvidia. Japanese technology giant SoftBank also invested $2 billion in Intel common stock.

Wall Street analysts expect Intel’s loss per share to remain unchanged at $0.02 for the fourth quarter of fiscal 2025. For the full fiscal year 2025, loss per share is projected to decrease 84% annually to $0.14. Analysts forecast a 221% improvement to EPS of $0.17 in fiscal 2026.

However, Malik expressed concerns about Intel’s CPU business. Intel’s Panther Lake turned heads at CES but won’t find its way into desktop PCs. Intel’s Arrow Lake and its upcoming refresh will attempt to hold the desktop CPU market until next-generation Nova Lake launches, likely in late 2026.

Arrow Lake has issues, particularly lackluster gaming performance, and the refresh isn’t expected to solve them. Malik worries Intel will continue to lose CPU market share to both AMD and Arm-based devices. Qualcomm has been making a push into the PC CPU market with Arm-based chips.

Rising memory chip prices could hurt overall PC demand, Malik noted. AI data centers consume large amounts of memory chips, and memory chip manufacturers have been shifting capacity to HBM used in AI accelerators.

Other analyst firms have taken varying positions on Intel stock. RBC Capital analyst Srini Pajjuri initiated coverage with a “Sector Perform” rating and $50 price target, citing Intel’s efforts to rightsize its business and healthy PC and server demand.

UBS raised its price target from $40 to $49 while maintaining a “Neutral” rating. The firm cited tight supply for Intel’s products and noted an “upside bias” for Q4 results due to strong PC and server demand.

KeyBanc Capital Markets took a bullish view, upgrading Intel to “Overweight” with a Street-high price target of $60. Analysts noted Intel has made progress in its manufacturing, especially relating to AI-driven chip sales. Melius Research also raised its rating from “Hold” to “Buy” this month with a $50 price target, noting the possibility that both Nvidia and Apple could consider Intel’s 14A node for production during the 2028 to 2029 period.

Wall Street maintains a consensus “Hold” rating on Intel stock. Of 43 analysts covering the stock, four have “Strong Buy” ratings, one has “Moderate Buy,” 33 have “Hold,” one suggests “Moderate Sell,” and four have “Strong Sell.” The mean price target of $39.62 represents 16% potential downside from current levels, though KeyBanc’s $60 target indicates 28% potential upside.

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