Intel Receives Double Upgrade from BofA Amid Underownership Thesis

What happened

On June 11, Bank of America analyst Vivek Arya issued a double upgrade for Intel, moving the stock from Underperform to Buy and increasing the price target to $135 from $96. The upgrade followed Intel's stock surge of over 200% year-to-date in 2026, rising from around $20 in May 2025 to near $100 by early May 2026. BofA now projects Intel's total calendar year 2030 earnings per share power at over $6, up from a prior estimate of $3 to $4. The firm expects server CPU sales to surpass $40 billion and external foundry revenue to exceed $45 billion by 2030. BofA cited growing confidence in Intel's ability to capitalize on opportunities in central processing units for agentic AI and contract chip manufacturing. The upgrade also highlighted Intel's underownership profile-despite a market cap exceeding $550 billion, Intel maintains only 16% institutional ownership as of May 2026, making it the second-least-owned stock among the 15 largest chip and AI-infrastructure companies. Recent business developments include partnerships with Apple for chip manufacturing, potential backup provider relationships with Google and Nvidia, participation in the Terafab multitrillion-dollar chip-manufacturing project, and a Cadence 14A node IP sign-up that strengthens foundry ecosystem visibility.

Why it matters

The upgrade reflects a fundamental reassessment of Intel's business prospects in the AI infrastructure buildout. As AI computing shifts from training to inference-particularly with agentic AI systems that autonomously complete tasks-demand for CPUs has accelerated beyond earlier expectations. BofA's $40 billion server CPU revenue projection for 2030 represents approximately 25% market share of a $170 billion-plus total addressable market, significantly above Wall Street's consensus estimate of $32.5 billion for Intel's data center and AI segment in 2030. The foundry business, once a drag on profitability, is now positioned as a potential alternative to Taiwan Semiconductor Manufacturing Co., which operates near full capacity. Intel's underownership status presents a technical catalyst-BofA drew comparisons to AMD, where institutional ownership rose roughly 1,400 basis points year-over-year to 39% during a period when AMD shares gained over 300%. For investors, the combination of improving fundamentals and low institutional ownership suggests potential for sustained buying pressure as funds expand positions. The $135 price target implies approximately 35% upside from recent levels near $100, contingent on Intel executing its roadmap under CEO Lip-Bu Tan, who took over in March 2025 and has prioritized manufacturing quality improvements.

Bigger picture

Intel's resurgence reflects broader dynamics reshaping the semiconductor industry. Supply constraints at TSMC have created openings for alternative foundry providers, while the evolution of AI workloads is rebalancing demand between GPUs and CPUs. Nvidia's GPUs remain dominant for training AI models, but the inference stage increasingly relies on CPUs, creating tailwinds for Intel and ARM Holdings. The $170 billion-plus server CPU market projection underscores the scale of enterprise and cloud infrastructure spending tied to AI deployment. Intel's potential to capture 25% of this market by 2030 would mark a significant competitive recovery after years of market share losses to AMD. The foundry opportunity represents Intel's strategic pivot toward manufacturing services, potentially capturing business from clients including Apple, MediaTek, and participants in Elon Musk's Terafab initiative. Industry-wide manufacturing capacity constraints are likely to persist through the decade, favoring established players that can scale production of advanced nodes. Intel's 14A manufacturing process and partnerships with design software providers like Cadence signal progress toward competitive parity with TSMC. The underownership thesis suggests institutional investors are still catching up to Intel's operational turnaround, creating potential for multiple expansion as confidence in execution builds.

What to watch

Key indicators include Intel's ability to deliver on its $40 billion server CPU revenue target by 2030 and secure major foundry customers. Watch for formal announcements of manufacturing agreements with Apple, Google, Nvidia, or other strategic partners referenced in recent reports. Quarterly earnings will provide visibility into CPU market share gains and foundry utilization rates. Progress on the 14A node and customer adoption of Intel's advanced packaging capabilities will be critical to foundry credibility. Monitor institutional ownership trends-any significant increase from the current 16% level could fuel additional stock gains, following the pattern seen with AMD. Execution risks remain substantial, including competition from ARM-based processors, potential moderation in AI capital expenditure, and the technical challenge of matching TSMC's manufacturing consistency. CEO Lip-Bu Tan's track record at Cadence and his ability to stabilize Intel Foundry will be closely scrutinized. Broader semiconductor supply-demand dynamics and customer willingness to diversify away from TSMC will influence Intel's foundry growth trajectory.