‘More Upside Ahead’: Intel Stock (INTC) Wins a New Street-High Price Target

Intel (NASDAQ:INTC) heads into Monday with momentum on its side, after stronger-than-expected Q1 results and an upbeat Q2 outlook sent the stock to new all-time highs.

Specifically, revenue in the quarter reached $13.58 billion, up 6.9% year-over-year, topping analyst estimates by $1.15 billion, while adjusted EPS came in at $0.29, exceeding expectations by $0.28.

Looking ahead to Q2, the company is calling for revenue in the range of $13.8 billion to $14.8 billion, some distance above the $13.06 billion the Street was after. Likewise, the company called for adj. EPS of $0.20, compared to the consensus estimate of $0.08.

The shift in sentiment around Intel represents something of a 180-degree turn. Not long ago, the company was perceived as unequipped to thrive in the new AI-driven paradigm. 

As Evercore analyst Mark Lipacis puts it, it has “been easy to not like INTC.” Around a decade ago, the company ceded its transistor leadership to TSMC. It has continued to lose market share to AMD in x86, while also facing pressure from ARM-based solutions developed by its own customers. At the same time, execution issues affected both its product roadmap and manufacturing operations, debt levels increased, and GPUs began to emerge as the preferred processing engine over CPUs.

However, three key shifts have emerged, the first being a renewed resurgence in CPUs. Lipacis’ checks indicate that as core AI workloads have shifted from LLM training and chat-based use cases toward inferencing and reinforcement learning, CPU-to-GPU ratios have moved from 1:4 and 1:8 to closer to 1:2. Moreover, as agentic workloads scale, a greater share of CPUs is needed to handle the orchestration of longer, more complex queries, with ratios potentially exceeding 1:2 and reaching as high as 10:1.

“We think that translates to AI-CPU demand of between 37m-74m units in 2030 assuming a CPU:GPU ratio of 1:1 to 2:1,” Lipacis, who ranks among the top 1% of Street stock experts, went on to say.

Secondly, execution has improved, with Intel’s new CEO strengthening the balance sheet and building a strategy that appears to have put the company “back on the competitive track.”

Lastly, geopolitical dynamics have underscored Intel’s unique role as the only US-based manufacturer operating at the leading edge of chip production, resulting in partnerships with the US government as well as companies like Nvidia and Tesla, with Lipacis expecting further collaborations.

“Given our CPU Renaissance Thesis tells us that the AI CPU market will be high growth for the foreseeable future, and INTC’s unique position as the only leading edge chip manufacturer in a rapidly deglobalizing market, we think investors will base valuations on EPS power 3-to-5 years out,” the 5-star analyst said.

Lipacis estimates Intel’s 2030 EPS power will land at $6.50, based on $150 billion in revenue, assuming the company captures one-third of the AI CPU market and builds a $25 billion foundry business.

As such, Lipacis has now upgraded his INTC rating from In Line (i.e., Neutral) to Outperform (i.e., Buy), while his price target goes from $45 to a new Street-high of $111, suggesting the stock will gain another 34% in the months ahead. (To watch Lipacis’ track record, click here)

The rest of Wall Street, however, is taking a more measured stance. Alongside Lipacis and 9 other bullish voices, the stock also draws 22 Hold ratings and 3 Sells, leaving it with an overall Hold (i.e., Neutral) consensus. After a ~124% run year-to-date, the $77 average price target now suggests the shares could pull back about 7% over the next 12 months. (See INTC stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.