Bank of America has upgraded its rating on Intel stock directly by two notches from "underperform" to "buy," while also raising its price target from $96 to $135.
Bolstered by this news, Intel (INTC) shares surged more than 5% in Thursday's pre-market trading, extending a robust rally that has been in place since 2026.
Rationale for the Upgrade
The core reason for this rating upgrade is the bank's growing confidence in the prospects for Intel's server chip business and its external foundry operations. The analysis team stated that their previous sum-of-the-parts valuation, based on 2028 estimates, had underestimated the company's longer-term potential in chip manufacturing and foundry services. The bank now forecasts that Intel's earnings per share could exceed $6 by 2030, a significant increase from prior estimates of $3 to $4.
Product and Market Outlook
At the product level, Bank of America projects that Intel's server chip sales will surpass $40 billion by 2030. Analysts explain this outlook from the perspective of agentic AI, noting that as AI workloads continue to evolve, the role of the central processing unit is structurally expanding—from traditional server management to coordinating autonomous AI agents. The bank estimates this specific market segment could reach approximately $70 billion by 2030.
Foundry Business Developments
Regarding the foundry business, Bank of America notes several potential collaborations within Intel's business pipeline, including possible wafer deals for Apple's M-series chips and MediaTek's Tensor Processing Unit wafers, as well as partnerships involving Terafab intellectual property and packaging services. The bank specifically highlighted Intel's recent IP collaboration with Cadence on the 14A process node, which it believes helps build a more sustainable ecosystem for its external foundry operations.
Institutional Holdings as a Catalyst
Furthermore, analysts view Intel's unusually low institutional ownership as a potential catalyst for share price appreciation. Despite a market capitalization of around $540 billion, Intel's weighting in S&P 500-related funds is only 16%, making it the second-lowest weighted stock in that segment. Bank of America contrasted this with Advanced Micro Devices (AMD), where institutional ownership increased by 1400 basis points over the past year, accompanied by a cumulative stock price gain of 309%.
Recent Performance and Market Sentiment
Intel's stock price has accumulated a gain of approximately 168% since the start of 2026, reflecting high market expectations for the mass production of its 18A process technology and its strategic positioning within AI infrastructure.
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