Intel shares moved higher in early trading, gaining about 5% premarket, after Bank of America sharply upgraded the stock and substantially raised its target price. The bank elevated its rating from Underperform to Buy and increased its price target to $135 from $96, citing improved clarity around two primary profit drivers - the companys server CPU opportunity and its external foundry business.
In its reassessment, BofA substantially increased its view of Intels long-term earnings potential. The bank now expects Intel to deliver earnings power in excess of $6 per share by 2030, a material upward revision from a prior range of $3 to $4. To derive its new price target the analysts applied a 25x multiple to their 2030 EPS power estimate of $6.24, and then discounted that valuation back two years to arrive at $135 per share.
BofA said its prior valuation framework - a sum-of-parts model using 2028 estimates - under-represented parts of Intels CPU and foundry prospects that are expected to crystallize further into the future. The banks updated view places greater weight on opportunities that extend beyond that 2028 horizon.
On the server CPU side, BofA projects sales to exceed $40 billion by 2030. The analysts characterize that figure as roughly 25% of what they estimate to be a $170 billion total addressable market for server processors. They frame the opportunity through the evolution of AI workloads, arguing that as these workloads mature - specifically into what they describe as agentic AI - the CPUs role will broaden from conventional server tasks to orchestration responsibilities for autonomous AI agents. The bank attaches a valuation of about $70 billion to that agentic AI category by 2030.
For Intels foundry initiative, BofA highlighted a set of potential engagements in the companys pipeline. Those include wafers for Apples M-Series products, MediaTek TPU wafers, Terafab intellectual property and packaging work, and a range of ARM-based server CPU opportunities. The analysts also noted a recent IP collaboration between Intel and Cadence on Intels 14A node, saying the partnership could help foster a more sustainable external foundry ecosystem.
Beyond fundamental drivers, BofA pointed to Intels relatively low institutional ownership as a potential catalyst for additional share-price upside. The bank observed that, despite a market capitalization near $540 billion making it the fifth largest among U.S. semiconductor and AI infrastructure names in their group Intel is held by just 16% of S&P 500 funds. That level of ownership makes Intel the second least-owned stock in the group, behind SanDisk in BofAs comparison.
The analysts drew a parallel with recent ownership dynamics at AMD, where fund ownership increased by about 1,400 basis points over the past year while the stock appreciated 309% in the same period. BofA suggests that a similar re-rating in ownership could be a tailwind for Intel if performance and sentiment both improve.
However, the bank also outlined key risks to its bullish scenario. Those risks explicitly include intensifying competition from ARM-based processors and custom chip designs, the possibility of a slowdown in AI-related capital spending, and execution risks tied to ramping leading-edge manufacturing capacity. These factors could impact both the CPU and foundry narratives if they materialize.
Context for markets and sectors
- Semiconductor and AI infrastructure sectors are most directly affected by BofAs reassessment, given the focus on server CPUs and foundry services.
- Enterprise IT and companies deploying large-scale AI workloads may see implications for procurement and architecture decisions as CPU roles evolve.
- Institutional investment flows into semiconductor names could shift if ownership patterns change following re-evaluations like BofAs.