Intel Stock Jumps After Bank of America Upgrades Shares to Buy
Intel shares surged around 5% in premarket trading after Bank of America (BofA) upgraded the semiconductor giant from Underperform to Buy and raised its price target from $96 to $135. The investment bank cited growing confidence in Intel’s long-term opportunities across both the server CPU market and its expanding foundry business.
The upgrade reflects a major shift in BofA’s outlook for Intel’s future earnings potential. Analysts now believe the company could generate more than $6 per share in earnings by 2030, significantly higher than the previous forecast of $3 to $4 per share.
Higher Price Target Based on Long-Term Growth Potential
According to BofA analysts led by Vivek Arya, the new $135 price target is based on a 25-times earnings multiple applied to Intel’s estimated 2030 earnings per share of $6.24.
The bank noted that its previous valuation approach, which focused on 2028 estimates, did not fully capture the long-term value of Intel’s CPU and foundry businesses. By shifting its focus further into the future, BofA believes the market is underestimating several key growth opportunities that could emerge over the next decade.
Intel’s Server CPU Business Could Become a Major Growth Driver
One of the biggest factors behind the bullish outlook is Intel’s position in the server CPU market. BofA expects Intel’s server processor revenue to exceed $40 billion by 2030, representing roughly 25% of a market that the bank estimates could reach $170 billion.
Analysts believe the rise of agentic AI will significantly increase demand for advanced CPUs. While processors have traditionally been used for managing servers and computing tasks, future AI systems are expected to rely heavily on CPUs to coordinate and manage autonomous AI agents.
BofA estimates this emerging agentic AI opportunity alone could represent a market worth approximately $70 billion by the end of the decade.
Foundry Business Gains Momentum
The bank also highlighted growing optimism surrounding Intel Foundry, the company’s contract chip manufacturing division.
Several potential opportunities are reportedly in Intel’s pipeline, including Apple M-Series wafer production, MediaTek TPU manufacturing projects, advanced packaging partnerships, Terafab intellectual property engagements, and additional ARM-based server CPU opportunities.
BofA also pointed to Intel’s recent collaboration with Cadence around its advanced 14A manufacturing process. The partnership is viewed as an important step toward building a stronger and more sustainable external foundry ecosystem capable of attracting major customers.
Low Institutional Ownership Could Provide Additional Upside
Another factor supporting BofA’s positive view is Intel’s relatively low institutional ownership.
Despite having a market capitalization of approximately $540 billion and ranking among the largest U.S. semiconductor and AI infrastructure companies, Intel is currently owned by only 16% of S&P 500 funds. That makes it the second least-owned company in its peer group, behind only SanDisk.
The analysts noted that increasing institutional ownership could act as a powerful catalyst for future stock gains.
To support this argument, BofA highlighted AMD’s experience over the past year. During that period, AMD’s institutional ownership increased by roughly 1,400 basis points while its stock price surged more than 300%.
Risks Remain Despite Bullish Outlook
While BofA sees significant upside potential for Intel shares, the bank also acknowledged several risks.
These include rising competition from ARM-based processors and custom chip designs, the possibility of slower AI infrastructure spending, and execution challenges related to Intel’s efforts to scale its next-generation manufacturing technologies.
Nevertheless, BofA believes Intel’s improving visibility in both server CPUs and foundry operations positions the company for stronger long-term growth than many investors currently expect.
