Intel foundry hype grows on Wall Street after reports of Apple, SK hynix talks
Investing.com -- Shares of Intel Corporation have surged roughly 100% over the past month as growing reports of customer traction for its foundry business fueled investor optimism, with recent speculation centering on potential partnerships with Apple Inc. and SK hynix.
Recent media reports, including a Wall Street Journal article discussing Intel and Apple, alongside a report from ZDNet Korea linking Intel with SK hynix, have strengthened expectations that Intel’s contract manufacturing ambitions are gaining momentum.
Deutsche Bank maintained its “Hold” rating on Intel shares while raising its price target to $100, based on roughly 20 times the high end of its revised long-term earnings power estimate of $4 to $5 per share.
Analysts said these developments suggest Intel’s foundry unit could secure both advanced packaging and front-end wafer manufacturing deals, the latter viewed as significantly more meaningful because of their scale, profitability potential, and validation of Intel’s manufacturing technology.
Analysts estimate that Intel acting as a foundry partner for a portion of Apple’s M-series chips could generate around $2 billion in annual revenue for Intel Foundry. However, the ultimate earnings contribution remains uncertain due to variables including pricing, manufacturing yields, and the heavy capital expenditures required as Intel ramps its foundry operations.
The brokerage noted that its long-term forecasts already assume Intel will generate approximately $2 billion in external foundry revenue in 2027 and roughly $4 billion in 2028, figures that underpin expectations for the foundry business to reach operating break-even by the end of 2027. Those assumptions are also a key reason the firm’s earnings-per-share estimates for 2027 and 2028 remain about 10% above Wall Street consensus.
Despite the improving outlook for Intel’s foundry business, analysts cautioned that much of the optimism now appears reflected in the stock’s valuation.