Intel (INTC) got a vote of confidence late last week, just days ahead of its Q2 earnings report on July 23. Susquehanna analyst Christopher Rolland raised the firm's price target from $80 to $115. The analyst expects a solid quarter, driven primarily by the strong server chip sales. This view lines up closely with what Intel's management said on its last earnings call. CFO David Zinsner stated that the server demand had improved over the previous three months, with double-digit growth expected to run into 2027. Rolland also believes that the server demand could outpace supply well into 2028. He also sees momentum in Intel's factory business and noted that Alphabet (GOOG) (GOOGL) could use Intel's advanced packaging for its next AI chips.
However, the analyst is more skeptical about the second half of the year. Rolland expects PC sales to be weaker than usual, mainly due to rising memory prices. Notably, this isn't just his view. In April, Intel's management also told investors that it expected PC demand to weaken later in the year. Servers are carrying the momentum, while the PC market looks softer.
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Before Susquehanna, several analyst firms, including Stifel Nicolaus, TD Cowen, and KeyBanc, had all recently increased Intel's price target as well. Early in July, HSBC dramatically increased its price target from $100 to $200. Intel has beaten revenue expectations for six quarters in a row. That streak is expected to continue this quarter, and the stock price dip over the last couple of weeks is enticing. While at any other point I would be skeptical of backing Intel, I believe a 33% fall in share price over just one month, for reasons that aren't company-specific, is as good a buying opportunity as one can get.
Founded in 1968, Intel Corporation operates as a developer, designer, marketer, manufacturer, and seller of computer chips and related technologies. The company generates revenue through three main segments: Foundry, CCG, and DCAI. Its product portfolio consists of graphics chips and processors for PCs, data centers, and AI applications. Moreover, Intel also offers semiconductor manufacturing and related services through its Foundry segment.
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