Intel's manufacturing successes lead to two ratings revisions. Is the crisis over?

Analysts at HSBC and Seaport have upgraded their ratings on Intel's stock, taking a positive view of signs of improvement in its contract chip business. This is despite the fact that the company is still far away from leadership in the industry, and new customers for the production of processors using Intel's new technology have not yet been named, notes MarketWatch. The chipmaker's shares rose 3.4% in trading on Jan. 20.

Analyst Frank Lee of HSBC raised his rating on Intel shares from Sell (Reduce) to Neutral (Hold), MarketWatch reported. Lee believes the chipmaker's traditional data center processor business will soon return to growth.

"As AI evolves from simple assistants to autonomous agents, the need for general-purpose computing power grows," Lee wrote. He believes the popularity of agent-based AI will increase the demand for universal computing, i.e. central processing units (CPUs) made by Intel.

Lee estimates that the server processor market could grow by 30-40% in 2026. Even taking into account a possible shortage of RAM, which could halve these rates, the growth will still be much higher than Wall Street's expectations (4-6% per year). According to Lee, the growth potential of Intel shares amid the recovery of the company's server business has not yet been fully taken into account by the market.

Despite the fact that Intel's contract manufacturing (foundry) is still struggling and has no external customers, Lee notes the growing interest in the chipmaker from potential customers. Among them he names Nvidia (possibly to produce gaming GPUs) and Apple (discussing a contract to produce M-series chips).

Seaport analyst Jay Goldberg changed his rating on Intel shares from Neutral to Buy on Tuesday, citing the "improving outlook" for contract manufacturing. He said the launch of Panther Lake processors, which happened at CES in early January, could improve Intel's position in both the enterprise and consumer segments. It also marked the first commercial announcement of chips built on Intel's new 18A process technology.

"At this point, the 18A is showing strong performance, indicating that Intel is once again competitive, or at least viable in production, for the first time in nearly a decade," Goldberg said.

He also added that contract customers are interested in the next generation process - Intel 18A-P. However, the foundry business is still far from a sustainable model, he emphasizes: 18A alone will not "save" Intel. The real test for the chipmaker is the 14A process, which is not expected to launch until 2028. "While Intel is not out of the turbulence zone yet, the successful launch of Panther Lake shows that the company is at least moving in the right direction," Goldberg believes.

Intel shares have already added 32% since the beginning of 2026, while the S&P 500 index fell into the negative zone on January 20. Over the last 12 months, Intel's securities have risen by 122%.

According to MarketWatch, of the 48 analysts tracking the chipmaker's securities, 34 of them advise to hold the securities (Hold rating), while only eight recommend buying the stock (Buy and Overweight). But a month earlier, there were five recommendations to buy. Six analysts advise to sell securities (Underweight and Sell).

The consensus target price, according to Wall Street, is $45.4: that's 6% below the closing price on Jan. 20.

This article was AI-translated and verified by a human editor