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Intel Shares Poised for 100% Surge on AI Foundry Boom
16 Sep
Summary
- Analyst Ben Reitzes maintains a Buy rating with a two-year target of $165.
- Intel's foundry business is seen as crucial for U.S. national security.
- A $20 billion stock sale was completed to fund Intel's foundry ambitions.
Analysts at Melius Research believe Intel shares could surge by approximately 100% from their current price. This optimistic outlook is driven by the growing strategic importance of Intel's foundry business, particularly in light of an AI-driven demand for domestically produced semiconductors.
Analyst Ben Reitzes has reiterated a Buy rating and set a two-year price target of $165, with potential upside to $200. He views Intel's foundry assets, encompassing intellectual property, facilities, and manufacturing, as critical to U.S. national security due to the global concentration of advanced chip production in Taiwan. The recent $20 billion stock sale, conducted at $95 per share, is interpreted as a sign of management's commitment to these foundry goals.
Reitzes suggests that Intel's foundry unit could eventually be spun off around 2030, aiming to become a "US Foundry National Champion." The analyst highlights a strong base of strategic backers, including the U.S. government and Nvidia, downplaying concerns about potential sales of government stakes. His valuation reflects a discount to a sum-of-the-parts analysis, indicating substantial potential for growth.
