Intel's stock extended its recent ascent on Monday, adding 6.6% in premarket trading as investors digested a report that the company and Apple have reached a preliminary manufacturing agreement. The rally builds on a powerful run that has seen Intel shares rise 125.6% over the last month and 230.7% year-to-date.
The latest gains follow a Wall Street Journal report that said Apple has agreed in principle to have Intel manufacture chips for Apple devices. That disclosure sparked a 14% jump in the stock on Friday as markets reacted to the potential customer relationship.
The Journal, citing people familiar with the matter, reported that the two firms have been engaged in intensive discussions for more than a year and finalized a formal agreement in recent months. The report noted that specifics about which Apple products would be built by Intel remain unclear.
Responding to the report, Lynx Equity reiterated a preference for Intel relative to AMD and set a $175 price target. In published comments, a Lynx analyst said the Journal's account "adds more fire to a stock that has already been on fire this year." The analyst added that, "With the involvement of two major entities, fears of the sustainability of IFS should decline in the minds of investors."
At the same time, Lynx cautioned that any immediate monetization of the potential Apple-Intel deal could be limited because of process development requirements. The firm noted, however, that investors are unlikely to wait for full monetization before pricing in the news.
The analyst team also identified a positive read-through for semiconductor capital equipment companies, naming ASML, Lam Research, Applied Materials, and KLA as potential beneficiaries from the development. Lynx nevertheless observed that a material increase in wafer fab equipment spending is unlikely to occur before 2028.
The facts reported so far leave details about product scope and timing unspecified. Market participants appear to be weighing the possible long-term implications even as near-term revenue expansion tied to the reported deal remains uncertain.