In a client note issued on Wednesday, analysts at Melius Research made a case for significant upside at Intel, arguing the chipmaker's foundry operations have grown materially more valuable as the market focuses on domestic semiconductor capacity tied to artificial intelligence.
Price targets and upside
Analyst Ben Reitzes reaffirmed a Buy rating and kept a two-year price objective of $165, while also noting that "even $200 over 2 years is on the table," a scenario that would imply more than 100% upside from the company's current trading level above $97. Reitzes framed that $165 target as reflecting a 15% to 20% discount to a $200 sum-of-the-parts valuation.
Market performance and context
Intel has already seen sharp gains this year, with shares rising roughly 160%, a pace that has outstripped both AMD and the broader semiconductor sector, according to the note.
Capital raise and management signal
The analyst also addressed Intel's recent equity offering, a roughly $20 billion stock sale conducted at $95 a share to support the company's foundry expansion. Reitzes described that transaction as a demonstration of management conviction in the foundry strategy rather than a reason to lower his valuation targets.
Valuation drivers: foundry and products
Reitzes broke the company into components in his valuation work, suggesting that Intel's foundry business and its product lines could each be worth considerably more than $80 per share on a standalone basis. He captured the shift in market focus with the line: "The AI 'puck' has skated toward Intel's foundry asset, in addition to CPUs in general," emphasizing how AI demand has broadened interest in foundry capacity as well as central processing units.
Strategic and national-security considerations
In the note, the foundry operation was positioned as strategically important to U.S. national security, given the concentration of advanced chip manufacturing in Taiwan. Reitzes suggested the unit could ultimately be separated from Intel around 2030 and envisioned as a "US Foundry National Champion."
Backers and political concerns
The analyst cited a lineup of strategic supporters for the foundry initiative, naming the U.S. government, Nvidia and SoftBank. He also addressed market worries about political intervention, saying fears that President Trump could sell part of the government's stake are overdone.
The note presents a bullish scenario predicated on accelerating demand for domestic foundry capacity, supportive strategic partners and a pathway to realizing a higher sum-of-the-parts valuation over the next two years.