As Intel stock rises on Wall Street, so does the number of recommendations to buy it / Photo: Tada Images / Shutterstock.com
Quotes of chipmaker Intel in trading on Wednesday, January 14, jumped more than 3% - almost to $49. This is the maximum level since January 2024. Investors are betting that support from U.S. President Donald Trump will strengthen the company's business in the segment of contract semiconductor manufacturing, explains Barron's.
Since the beginning of the year, Intel shares have already risen 30% thanks to the announcement of new processors and Trump's statements in support of the company's head Lip-Bu Tan. Last August, the U.S. government invested $8.9 billion in the chipmaker, receiving a 10% stake.
The rapid growth has made Intel's securities "overheated," Barron's notes: according to FactSet, they are now trading at a P/E multiple, which reflects the ratio of share price to projected annual earnings, of more than 76. By comparison, the stock multiple of chipmaker Nvidia, which leads the AI processor market, is less than 25. Nevertheless, Intel's backers expect that new chips made with Intel's innovative 18A technology and political support from the White House will help attract outside customers who could see the company as an alternative to Taiwan's TSMC, the publication writes. This would cut multi-billion-dollar quarterly losses at Intel's contract chip division.
Who will become an Intel customer
Investors' hopes for a major contract for Intel were fueled by an investment from Nvidia, which put $5 billion into the company, but there is no indication yet that Nvidia is going to produce chips from Intel, Barron's believes. The main expectations of market participants are related to Apple: KeyBanc analyst John Wine believes that Intel has received a contract from Apple to produce entry-level 18A M-series chips for MacBooks and iPads, and is also in talks to release A-series mobile processors for iPhones in 2029.
Trump told reporters on Tuesday that after the U.S. investment in Intel, "Apple joined in too." However, he did not elaborate on what he meant. Apple did not respond to Barron's request for comment.
What analysts recommend
KeyBanc on Tuesday raised its recommendation on Intel shares from neutral to "above market" (Overweight), which is equivalent to a buy recommendation, and raised its price target from $35 to $60, which implies a potential upside of almost 29% from the closing level of trading on January 13. This target price is one of the highest on Wall Street, according to FactSet.
"Our data shows that Intel is almost completely sold out of server processors for 2026. Given the strong demand, the company is considering raising the average selling price by 10-15%," the analyst wrote in a note quoted by Barron's. He does not believe that the 18A process introduced into production will allow Intel to catch up with the leader of contract chip production - TSMC. However, the analyst believes that the US chipmaker could overtake Samsung Electronics. "Progress on 18A is enough to convince us: Intel can become the No. 2 supplier in the industry. - wrote Vin - We're seeing significant progress - the percentage of year-old processors produced on the 18A process is already above 60 percent."
Last week, Melius Research analyst Ben Reitzes also upgraded his rating on Intel stock from neutral to "buy" and raised his target price from $33 to $50. "We really like Lip-Bu Tan, but more importantly, we like him even more for those with power - President Trump, [U.S. Commerce] Secretary [Secretary of Commerce] Latnick, [Nvidia CEO] Jensen Huang, and even [AMD CEO] Lisa Su," Reitzes wrote in a note cited by Seeking Alpha.
In total, according to MarketWatch, of the 46 analysts tracking Intel shares, 32 have a neutral stance with a Hold rating. Eight (Buy and Overweight ratings) advise buying Intel stock. However, a month ago the company had only five buy recommendations, and three months ago it had four. Seven analysts now advise to sell the chipmaker's shares (Underweight and Sell). And the Wall Street consensus price target yields almost 9% to current quotes.
This article was AI-translated and verified by a human editor
