Key highlights:
- Melius Research reiterated its Buy rating and $165 two-year price target for Intel
- Analyst Ben Reizes said Intel could reach $200 within two years if its foundry and CPU business deliver on expectations
- The thesis centers on Intel’s foundry assets, US chipmaking demand and strategic backing from Nvidia, SoftBank and the US government
Intel stock is seeing a fresh bullish case from Melius Research, which sees the chipmaker’s foundry business becoming more valuable as demand for advanced chips grows. Analyst Ben Reitzes reiterated a Buy rating and a two-year $165 price target while saying Intel can reach $200 in the same period.
Melius sees Intel’s foundry as a major value driver
Reitzes based the outlook on a sum-of-the-parts valuation that assigns more than $80 per share of potential value to each of Intel’s foundry and product businesses. The analyst’s $165 target represents a 15% to 20% discount to the analyst’s $200 valuation.
Since the start of the year, Intel has surged by over 163% to sit at $97.14. Despite outperforming AMD and SMH on year-to-date metrics, Reitzes argues that there is still room for Intel stock to grow.
The analyst argued that artificial intelligence (AI) demand is increasing attention on Intel’s manufacturing assets. Intel’s foundry operation includes its semiconductor manufacturing facilities, engineers, and intellectual property, giving the company a potential role in the push to expand advanced chip production in the US.
Reitzes pointed to Intel’s recent $20 billion stock sale at $95 per share as evidence that management remains committed to funding its foundry ambitions. Intel has also attracted strategic backing from Nvidia, SoftBank and the US government.
“Rather than trimming it after Intel sold $20B of stock at $95 to fund its foundry ambitions, we could make an argument that even $200 over 2 years is on the table,” wrote Reitzes.
Intel stock surges 4% in pre-market
Melius’ bullish forecast for Intel has triggered optimism for investors. At press time, Intel stock is up nearly 5% in pre-market trading, teeing up a strong start for the rest of the trading day.
Intel’s pre-market rally comes as the broader stock market attempts to recover from Wednesday’s selloff following the Federal Reserve’s latest rate decision. US equities remain higher for the year, but elevated rates and oil prices continue to shape investor sentiment across sectors.
Intel stock closed at $97.14 on Wednesday, with Reitzes’ $165 prediction representing a near-70% upside from present levels. Meanwhile, the $200 scenario represents more than a doubling from current pricing, although Reitzes presented it as a longer-term possibility rather than his formal price target.
A week ago, Intel shares spiked by 9% to reach $105 amid reports of a 10% CPU price increase.
Source:: Intel Stock Could Double to $200 as Melius Sets $165 Price Target