Last Update 23 Nov 25

INTC: Future Will Show Measured Progress in AI and Foundry Amid Ongoing Risks

Analysts have raised their average price target for Intel to the $35 to $39 range, an increase of up to $18, citing improved execution, strengthening demand, and more positive foundry and AI trends, while noting that some execution risks remain and fundamentals have not fully caught up to recent share gains.

Analyst Commentary

Recent Street research presents a nuanced picture of Intel's outlook, with opinions split between expectation of continued recovery and caution regarding the path forward. Analysts continue to monitor Intel’s execution, growth initiatives, and valuation in light of changing industry dynamics.

Bullish Takeaways

Bullish analysts have raised price targets for Intel, with several projecting values in the upper $30s. This reflects optimism around improved execution, clarity in AI strategy, and momentum related to the foundry business.
Positive developments in product demand and new partnerships, including collaborations with leading technology firms, are viewed as supportive of Intel’s competitive positioning and long-term growth opportunity.
Analysts see Intel’s strengthened balance sheet and new management as contributing factors to greater investor confidence and potential for continued operational improvements.
Some recent earnings results and forward-looking guidance have exceeded expectations. Bullish commentators believe this suggests that the company may be turning a corner despite sector headwinds.

Bearish Takeaways

Bearish analysts caution that valuation has moved ahead of fundamentals, with shares trading well above historic earnings multiples and current financials yet to justify recent gains.
Execution risks remain significant, as Intel continues to lag leading pure-play foundry competitors in several areas. Challenges related to margin pressure and capital intensity also persist.
Certain analysts note that the impact of potential foundry contracts from industry peers may be immaterial to Intel’s overall financial performance, particularly due to low pricing and margins in packaging services.
Despite positive headlines and improved near-term prospects, the long-term trajectory remains uncertain. Sustained recovery depends on the successful delivery of critical roadmap and manufacturing goals.

What's in the News

Intel CEO Lip-Bu Tan denied allegations regarding a new executive transferring trade secrets from TSMC and emphasized respect for intellectual property. (Bloomberg)
U.S. plans to impose steep tariffs on imported semiconductors may face delays, as officials signal a more cautious approach with China. (Reuters)
America's chip export restrictions are causing significant semiconductor shortages in China, prompting Chinese government intervention in distribution priorities for domestic companies like Huawei. (Wall Street Journal)
China has suspended export controls on critical minerals such as gallium and germanium for a year, which could potentially ease supply pressures for U.S. semiconductor manufacturers. (New York Times)
The Chinese government now mandates the use of domestically produced AI chips in state-funded data centers, thereby excluding foreign-made AI chips from new projects. (Reuters)

Valuation Changes

Fair Value: Unchanged at $37.27 per share.
Discount Rate: Increased slightly from 11.64% to 11.78%.
Revenue Growth: Remains stable at 5.56%.
Net Profit Margin: Increased marginally from 9.79% to 9.86%.
Future P/E: Decreased slightly from 49.20x to 49.06x.

Flattening its structure and refocusing its portfolio might improve agility, profitability, and innovation, boosting future revenue and competitive advantage.
Strategic AI focus and foundry service enhancement could increase market share and revenue through growth in emerging markets and strengthened customer trust.
Organizational complexity and slow AI adaptation hinder innovation and scaling, risking competitive positioning and future revenue growth amid economic uncertainties.

Catalysts

About Intel

Designs, develops, manufactures, markets, and sells computing and related products and services worldwide.What are the underlying business or industry changes driving this perspective?

Intel is focusing on flattening its organizational structure to enhance agility, make swifter decisions, and foster innovation, which could lead to improved product development and competitive advantage, positively impacting future revenue and earnings growth.
By refocusing its portfolio and eliminating non-core distractions, Intel aims to decrease operating expenses and streamline operations, potentially leading to improved profitability and net margins in upcoming years.
The strategic push toward developing best-in-class products for new and emerging AI workloads, along with refining their AI strategy, positions Intel to capture growth in an expanding market, likely boosting future revenue and market share.
Intel plans to strengthen customer trust in its foundry services by ensuring reliability and customer service, potentially leading to an increase in foundry revenue as the company builds its reputation and customer base.
Intel's efforts to optimize manufacturing processes and leverage existing assets without immediately expanding capacity could result in reduced capital expenditures and better asset utilization, positively affecting both future cash flow and returns on investment.

Intel Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Intel's revenue will grow by 3.1% annually over the next 3 years.
Analysts assume that profit margins will increase from -38.6% today to 8.9% in 3 years time.
Analysts expect earnings to reach $5.2 billion (and earnings per share of $1.21) by about September 2028, up from $-20.5 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $-2.7 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.4x on those 2028 earnings, up from -5.2x today. This future PE is lower than the current PE for the US Semiconductor industry at 33.5x.
Analysts expect the number of shares outstanding to grow by 1.48% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.97%, as per the Simply Wall St company report.

Intel Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Organizational complexity and bureaucratic silos are hindering innovation and agility, which could adversely affect product development and revenue growth.
The need to significantly reduce OpEx and CapEx indicates financial strain, which may impact net margins and future earnings if not managed effectively.
The potential economic slowdown, exacerbated by tariff uncertainties and macroeconomic pressures, poses a risk to customer demand and future revenues.
Intel's AI strategy and adaptation to emerging workloads require significant transformation, and slow execution in this area could impact competitive positioning and revenue prospects.
Capacity constraints and reliance on older product lines suggest challenges in manufacturing scalability, impacting gross margins and revenue growth potential.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $22.061 for Intel based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $28.0, and the most bearish reporting a price target of just $14.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $58.1 billion, earnings will come to $5.2 billion, and it would be trading on a PE ratio of 27.4x, assuming you use a discount rate of 12.0%.
Given the current share price of $24.44, the analyst price target of $22.06 is 10.8% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.