<p>Most Wall Street analysts who cover <strong>Intel</strong> <span class="ticker-mention inline-flex items-center font-bold">(INTC <span class="ml-1 text-red-900">2.34%</span>)</span> aren't all that optimistic about the stock, and it's not hard to see why. Intel has been struggling against multiple challenges for years. In manufacturing, delays and missteps contributed to <strong>TSMC</strong> pulling ahead and giving Intel's competitors a manufacturing advantage. In the PC and server CPU business, <strong>AMD </strong>has been consistently gaining market share.</p>
<p>Investors became much more optimistic about Intel over the past year. High-profile deals with the U.S. government and <strong>Nvidia</strong> injected Intel with capital, and rumors point to <strong>Apple</strong> potentially using Intel Foundry for some of its chips. Wall Street is finally starting to catch up. Earlier this week, an analyst at KeyBanc upgraded the stock to &#34;buy&#34; and increased his price target to $60. On Thursday, another analyst jumped on the bandwagon.</p>
<div><img alt="The Intel logo on a cube in front of a building." width="880" height="528" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTE3NjMvaW50ZWwtY3ViZS1zdGF0dWUtd2l0aC1pbnRlbC1sb2dvX2ludGVsLTEuanBnJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTE3NjMvaW50ZWwtY3ViZS1zdGF0dWUtd2l0aC1pbnRlbC1sb2dvX2ludGVsLTEuanBnJnc9Mzg0MA"/>
<p>Image source: Intel.</p>
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<h2>The foundry opportunity</h2>
<p><strong>Citigroup </strong>analyst Atif Malik dropped his &#34;sell&#34; rating on Intel stock by upgrading it to &#34;hold.&#34; Malik also <span>set a $50 price target, which is slightly above</span> the current stock price.</p>
<p>Malik isn't as optimistic about Intel's prospects compared to the KeyBanc analyst, but he sees a significant opportunity for the company to win business for its foundry segment. There are three components to Malik's overall thesis. First, Intel should benefit from a shortage of advanced packaging capacity at TSMC. Second, the U.S. government's investment creates an incentive for companies to consider Intel for manufacturing. And third, companies designing custom AI chips unable to secure manufacturing capacity at TSMC will opt for Intel instead.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>The Intel 18A process is in production, with Intel's own Panther Lake chips set to debut in laptops shipping later this month. The KeyBanc analyst believes that Intel has reached yields of around 60% for Intel 18A, and the company has noted that yields are now improving at industry-standard rates. This points to a successful process node that should be compelling for chip designers struggling to secure manufacturing capacity.</p><div><div><div>Advertisement</div><div><div></div></div></div></div>
<p>Specifically, Malik expects AI ASICs, which are specialized chips designed at the hardware level for AI workloads, to find their way to Intel Foundry. Many companies, including <strong>Alphabet</strong>, <strong>Amazon</strong>, and <strong>Microsoft</strong>, design their own custom AI chips. As AI finds more use cases, demand for AI inference capacity could drive significant AI chip business to Intel Foundry.</p><div><div id="in_line_article_pitch_container"></div></div>
<h2>There are still risks</h2>
<p>One thing preventing Malik from jumping to a &#34;buy&#34; rating is some pessimism around Intel's CPU business. While Intel's Panther Lake turned heads at CES, the chips won't find their way into desktop PCs. Intel's Arrow Lake and its upcoming Arrow Lake refresh will attempt to hold down the desktop CPU market until the next-generation Nova Lake launches, likely in late 2026.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Intel Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0lOVEMucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL0lOVEMucG5nJnc9MTI4"/></div><div><h2>NASDAQ: INTC</h2><div>Intel</div></div></div><div><div><div>Today's Change</div><div>(-2.34%) $-1.13</div><div>Current Price</div><div>$47.19</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$234B</div><div>Day's Range</div><div>$46.71 - $50.20</div><div>52wk Range</div><div>$17.66 - $50.39</div><div>Volume</div><div>4.3M</div><div>Avg Vol</div><div>93M</div><div>Gross Margin</div><div>35.58%</div></div></div></div></section>
<p>Arrow Lake has some issues, namely lackluster gaming performance, and the refresh isn't going to solve them. Malik worries that Intel will continue to lose CPU market share to both AMD and <strong>Arm</strong>-based devices. <strong>Qualcomm </strong>has been making a push into the PC CPU market with Arm-based chips, although compatibility issues have slowed adoption.</p>
<p>On top of potential market-share losses, Malik notes that rising memory chip prices could hurt overall PC demand. AI data centers consume incredible amounts of memory chips, and memory chip manufacturers have been shifting capacity to HBM used in AI accelerators. Higher PC prices could shrink PC sales temporarily, making Intel's comeback in the PC business more difficult this year.</p>
<p>While Malik is more balanced in his view compared to the KeyBanc analyst, Intel and its comeback story are clearly starting to win over Wall Street after years of disappointing results. Some positive foundry news this year could propel Intel stock well past Citi's $50 price target, and in the long run, the company has the potential to become a major player in the foundry industry.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

INTC

<p>Wall Street analysts are beginning to show optimism towards Intel (INTC) stock, with KeyBanc upgrading it to "buy" and setting a price target of $60. Citigroup also upgraded Intel from "sell" to "hold" with a $50 target, citing opportunities in the foundry segment due to TSMC's capacity shortages and U.S. government investments. However, concerns remain about Intel's CPU market share and rising memory chip prices affecting PC demand. Despite these challenges, Intel's potential in the foundry industry is gaining attention.</p>

- Wall Street analysts remain cautious about Intel due to ongoing manufacturing challenges and competition from AMD, despite a recent upgrade from KeyBanc.  
- Citigroup's Atif Malik upgraded Intel to "hold" with a $50 target, highlighting potential growth in its foundry segment driven by U.S. government investments and advances in AI chip manufacturing.  
- Risks include Intel's declining CPU market share and rising memory prices, which could hinder PC demand and complicate Intel's recovery in the marketplace.

Wall Street Is Starting to Like Intel Stock Again