Intel (INTC) has gained about 263.09% year to date at the time of writing, Tuesday afternoon, June 23. Meanwhile, the SPDR S&P 500 index (SPY) is up about 8.04% in the same period.
Intel stock has outpaced the S&P 500 by a wide margin, thanks to its position in the semiconductor sector, which is rallying on the AI boom.
News that fueled the INTC stock rally:
- The company said it will join Elon Musk’s Terafab project, Reuters reported.
- Intel expanded a multiyear partnership with Google to build out AI and cloud infrastructure.
- Intel reported better-than-expected earnings.
- Intel signed a preliminary agreement with Apple to manufacture chips, the Wall Street Journal confirmed.
The wider tech sector is facing a sell-off, and Intel is caught in it, trading 5.07% down at $133.79, as reported by Yahoo Finance.
The current sell-off is probably just a small bump in the road, at least if Bank of America analysts are correct. Bank of America analyst Vivek Arya and his team were in the bearish camp, rating Intel stock underperform until June 11, when they upgraded it to buy.
It hasn’t been two full weeks since the last note, and in a fresh research note shared with me, Arya has raised his Intel price target again.
The price target increase comes as the team has raised its 2030 total addressable market (TAM) for the semiconductor industry to $2.7 trillion from $2.3 trillion.
The main pain point for Intel is its foundry business, but the company has been making strategic moves and hitting the previously set goals.
Intel’s key moves for improving its foundry strategy
On June 8, Cadence (CDNS) and Intel Foundry expanded their collaboration to advance Design Technology Co-Optimization.
The new multi-year agreement combines Cadence’s agentic AI-driven electronic design automation and IP solutions with Intel’s next-generation manufacturing process (node) technologies, beginning with Intel 14A.
The node is important for Intel Foundry’s customers because its size indicates device generation, with smaller features and higher transistor density, resulting in improved performance and efficiency.
This collaboration with Cadence is important to Intel Foundry’s strategy, as the companies will work to optimize Intel 14A and deliver production-ready process design kits.
For the layman, the easiest way to think about process design kits is that they provide everything needed to actually design a chip for the specific node the kit targets.
This is why good process design kits are vital for the foundry business, as they’ll help attract more customers to Intel’s advanced node.
Intel Foundry confirmed during the 2026 VLSI Symposium that Intel 18A-P, the first performance enhancement in the Intel 18A node family, has entered risk production. This means that Intel achieved the timeline it first shared with customers and partners last year.
Key advancements provided by 18A-P:
- Intel 18A-P delivers 9% higher performance at equal power.
- 20% to 40% improved thermal resistance.
- Intel 18A-P is fully design rule compatible with Intel 18A, enabling straightforward reuse of existing IP and design flows.
Intel appointed Seok-Hee Lee as executive vice president of Intel Foundry. Lee will report directly to CEO Lip-Bu Tan. He will lead all advanced packaging, system integration, back-end technology development, and back-end manufacturing.
“Advanced packaging and system integration are becoming defining capabilities for next-generation computing systems,” stated Tan in the press release.
Naga Chandrasekaran, executive vice president of Intel Foundry, will continue reporting to Tan and will lead front-end technology development, as well as front-end manufacturing.
Shutterstock/TheStreet
Bank of America raises Intel stock price target
Analysts said they expect Intel server CPU sales to reach $40 billion or more by 2030, representing about 25% of the $170 billion TAM (this is the TAM for CPUs only).
The team believes Intel will become a fully established Integrated Device Manufacturer by 2030.
Analysts highlighted opportunities for Intel Foundry:
- Apple M-Series wafers
- MediaTek TPU wafers
- Terafab IP/packaging
- Potentially other ARM-based server CPUs
- Edge AI expansion into the client
They noted that all of these opportunities are more likely to be realized thanks to the collaboration with Cadence.
Arya reiterated a buy rating for Intel stock and raised the price target to $160 from $135, based on a 31x multiple of his 2030 EPS estimate of $6.24, discounted back two years, due to Intel’s key server CPU and external foundry wafer/packaging opportunities that extend far out.
He noted that his price target implies a 2028 total company enterprise value-to-sales ratio of 10.7x, which is above the historical 1.7x to 4x range. He believes that the estimate is appropriate given the increasing server CPU and external foundry opportunities, and is offset by near- to medium-term manufacturing ramp-up uncertainties.
Analysts noted downside risks for Intel stock:
- Lower-than-expected ramp at Intel Foundry, particularly for its new 18A and upcoming 14A nodes
- Lack of material external foundry customer in wafer processing
- Weaker-than-expected trends in a mature PC market
- Accelerated share loss to major CPU competitors
Upside potential:
- Key external foundry packaging/wafer deals that could significantly boost sales/utilization
- Greater-than-expected yields/ramps at 18A and upcoming 14A nodes
- Stronger-than-expected PC market from Windows 10 refresh or AI uplift
- Geopolitical tensions could boost sentiment for domestic manufacturing assets
Related: Intel CEO gives investors a reality check
