Wall Street's Sentiment on Intel Flips: What Changed?

For years, Wall Street has been skeptical about Intel’s prospects. The semiconductor giant has faced relentless competition from AMD in CPUs and process technology lagging behind TSMC in manufacturing. But something’s shifting — and analyst upgrades are now coming in.

The Turning Point

Earlier this week, KeyBanc Capital Markets upgraded Intel stock to “buy” with a $60 price target. Days later, Citigroup analyst Atif Malik ditched his “sell” rating and moved to “hold” with a $50 target. This isn’t random. A combination of factors is catching Wall Street’s attention: government deals injecting capital, partnerships with Nvidia, and speculation that Apple might tap Intel Foundry for chip manufacturing.

The momentum is real. Investors have already shown optimism over the past year, and now the analysts are following suit.

Why the Foundry Business Matters

Here’s where the bull case gets interesting. Malik identifies three specific catalysts for Intel’s foundry segment:

First, TSMC faces a bottleneck in advanced packaging capacity. This creates an opening for competitors. Second, U.S. government incentives push companies toward domestic manufacturing options like Intel. Third, companies designing custom AI chips that can’t get TSMC capacity will have nowhere else to turn.

The company’s 18A process is already moving into production. Intel’s Panther Lake chips are about to ship in laptops this month, and KeyBanc estimates the company achieved around 60% yields — a sign the process node is maturing at industry-standard rates. For chip designers desperate for manufacturing slots, that’s compelling news.

The AI angle is particularly attractive. Tech giants like Alphabet, Amazon, and Microsoft design their own proprietary AI chips. As AI demand explodes, the need for custom AI accelerators and inference chips could funnel significant business to Intel Foundry.

Reality Check: The Risks Remain

Malik’s hesitation about a full “buy” rating points to genuine concerns. Intel’s CPU business is still struggling. While Panther Lake generated buzz at CES, it won’t reach desktop computers. Arrow Lake and its refresh will hold the line until Nova Lake arrives in late 2026, but Arrow Lake has performance gaps that a refresh won’t cure.

Qualcomm is making gains with Arm-based PC processors, though compatibility issues are slowing momentum. Meanwhile, rising memory chip prices could dampen overall PC demand — memory manufacturers are shifting capacity toward AI accelerator HBM, potentially making PCs more expensive and squeezing Intel’s traditional markets.

The foundry story is promising, but it’s not a complete turnaround narrative yet.

The Bottom Line

After years of skepticism, Wall Street is cautiously embracing Intel’s comeback potential. The foundry business opportunity is substantial enough to move the needle, and positive developments in that segment could easily push Intel stock well beyond current price targets. For long-term investors, the company’s transformation from struggling chipmaker to foundry competitor is worth monitoring — but it’s still very much a work in progress.