Market Reawakening for Intel
Wall Street is once again treating Intel as a significant player in the market. The company's shares have already seen a 31% increase this year, positioning it as the third-best performer within the S&P 500. This impressive gain follows an even more substantial 84% surge in 2025, bringing the stock close to a two-year high.
This turnaround is particularly noteworthy given the severe downturn in 2024, where Intel experienced a 60% collapse. During that period, rivals capitalized on the artificial intelligence boom, leaving Intel behind. However, the sentiment surrounding the company has shifted dramatically. Kim Forrest of Bokeh Capital Partners commented on this resurgence, stating, "It’s back from the dead. It was painful to own and it’s wonderful now." Forrest has been a long-term holder of the stock.
Analyst Optimism Grows Ahead of Earnings
Several factors are contributing to this positive shift in market perception. The company's financial outlook appears less dire, and analyst sentiment has seen a notable improvement. Furthermore, discussions about new foundry customers are gaining momentum.
An additional layer of interest stems from the political landscape, particularly with Donald Trump, now the 47th president, and his emphasis on an "America First" agenda. As Intel prepares to release its fourth-quarter results after the market closes on January 22, investors are keenly awaiting concrete evidence of its progress.
Major financial institutions like Citi and KeyBanc have upgraded their ratings for Intel. The stock currently boasts the highest number of buy-equivalent ratings in over a year.
Earlier this week, John Vinh, an analyst at KeyBanc, upgraded the shares to "overweight." He cited robust demand, advancements in the foundry division, and the potential for a significant deal with Apple for chips used in Macs and iPhones as key drivers for his optimistic outlook.
Vinh suggested that Intel's 18A process could establish the company as a credible second-tier foundry, potentially surpassing Samsung. He set a price target of $60, the highest on Wall Street, indicating an expected 24% upside from its closing price of $48.32 on Thursday.
However, not all analysts share this uniformly positive view. The average price target for Intel stands at $40.66, which implies a potential 16% decline over the next year. Some analysts believe that Wall Street has been slow to adjust its assessments. Citi, for instance, raised its rating to "neutral" from "sell" and increased its price target to $50 from $29. Analyst Atif Malik elaborated on this view:
We believe Intel should benefit from tight advanced packaging capacity at TSMC and has a window to attract wafer customers with U.S. government support.
Foundry Ambitions and Political Alignment Boost Intel's Prospects
Beyond the promising foundry developments, Intel is also experiencing demand for its central processing unit (CPU) chips, which are crucial for PCs and data centers. These systems continue to require CPUs, even with the increasing presence of GPU chips from companies like Nvidia.
Notably, Donald Trump played a role in facilitating U.S. government investment in Intel last year, following public criticism of CEO Lip-Bu Tan. Investments from Nvidia and SoftBank have further bolstered Intel's financial standing.
Paul Meeks of Freedom Capital Markets highlighted this strategic advantage: "You have a company seen as being on the right side with power brokers in Washington and with marquee tech firms."
Geographical factors also provide support for Intel's stock. As one of the few major chip manufacturers with production facilities on U.S. soil, Intel is seen as a more stable option amidst rising geopolitical tensions around Taiwan, a region crucial for TSMC, the world's leading foundry.
Despite these positive indicators, Intel is currently trading at over four times its estimated sales, a valuation not seen in more than twenty years.
According to Bloomberg estimates, Intel's revenue is projected to increase by 3% in 2026, following a 1% decrease in 2025.