Intel was a firm that has been dismissed so many times, but now it is time for it to enjoy a change of mood on Wall Street after all. Its rapid growth of last year has made the analysts, who once were definite skeptics, reconsider their positions.
Intel’s stock once again increased, as two analysts upgraded their evaluations of the shares right before Tuesday’s session, bringing it up almost 5%, which shows that the momentum they overlooked could indeed be supported by the improving fundamentals. The upgrades are not indications that Intel is suddenly without faults, but it does indicate that the storyline is changing from recurrent decline towards a cautious recovery.
Rise of AI Gives Intel’s Core Business a New Life
One of the analysts, HSBC’s Frank Lee has shifted his perspective about Intel, and has upgraded the company from a bearish “reduce” rating to a “hold” rating. Such a change might seem small, but on the other hand, it is significant for Intel. Lee is of the opinion that the demand for the server chips would increase 30% to 40% per year in 2026, despite the memory supply constraints that could cut the forecast in half.
Either way, his numbers still outperform the 4-6% growth, which the Wall Street projected. Now, this year has seen Intel shares go up 25% and 126% over the last year, Lee explains that the potential from Intel’s core server business is not entirely reflected in the stock. This is actually good news for the investors who worry that they may have missed the opportunity already.
Foundry Problems & Foundry Possibilities
The foundry dreams of Intel are still, above everything, the most controversial part of the company’s story. There have been different kinds of setbacks; there are no external customers that are visible to the public, and the company has lost its credibility for years, which has led investors to be cautious, and they are right to be so.
However, Lee sees the engagement with potential customers increasing, and among other things he mentions that there is a possibility that Nvidia could use Intel’s foundry for gaming GPUs, and Apple could be talking to Intel about producing M-series chips for its product line.
Even the tiniest hints of the interest from such big names are enough to attract the market’s attention, particularly for the flat-lined foundry business that many had already dismissed as a defeated cost.
Analyst Jay Goldberg from Seaport confirmed the slightly better outlook with an upgrade of Intel’s rating to buy. He pointed out Intel’s launch of Panther Lake processors at CES, and the introduction of the 18A process node as indicators that the company might become competitive in manufacturing again for the first time in almost a decade. Although Goldberg states that 18A by itself won’t “save” Intel, as its output is such that it is at least competing in the race, and is not just watching from the sidelines.
Goldberg said,
“18A looks highly performant, meaning that Intel is competitive (or at least viable) again in manufacturing for the first time in almost ten years. The foundry still has a long way to go before we can contemplate viability. The 18A node was never going to be enough to save Intel. That being said, while Intel is not out of the woods in terms of competitiveness, the strong showing for Panther Lake shows the company is at least back on the right path”.
Long Road Ahead
The analysts have a common opinion that Intel’s foundry still has a lot to do before it can be considered as a true competitor to the leading companies in the industry. The real challenge will be the ability of Intel to successfully launch its future 14A process, which is planned for around 2028.
That time is not too far from now, and Intel’s past has made it very difficult to gain its trust. Yet, the strong performance of Panther Lake and the early interest in advanced packaging technologies such as Embedded Multi-die Interconnect Bridge could allow Intel to win external customers, specifically at a time when Taiwan Semiconductor Manufacturing is facing capacity constraints.
Bottom Line
Intel still faces challenges, and even its new optimists are quite careful with their expectations. Yet the widespread upgrades completely imply that the company has made an important change, where Intel is now considered not to be totally defeated in the competition.
The company seems to be heading in the right direction with a server business that is coming back to life, a greater demand for agentic AI, and signs of life in its foundry operations. For a stock that was considered a relic of the past for years, by just being alive again, might be its most positive signal from the market point of view.
