JPMorgan lifts Intel rating as execution under Tan has been solid

Investing.com -- JPMorgan upgraded Intel to Neutral from Underweight in a new note, stating that the risk/reward is now much more balanced as the stock approaches the bank’s $85 price target.

Analyst Harlan Sur noted that Intel shares have pulled back about 36% from their June peak, compared with a 20% to 25% decline for the broader chip group.

Since JPMorgan downgraded the stock in November 2022, Intel’s server x86 CPU revenue share has fallen from 77% to 53%, and its PC CPU share has dropped from 81% to 68%. Sur expects a few more quarters of share losses, especially in server CPUs.

In foundry, Intel appears to be making strong inroads on yields, manufacturability and new customer engagements. However, it generated barely $1 billion in annualized external foundry revenue in the first half of 2026, compared with $150 billion for TSMC.

Sur said that since Lip Bu Tan became CEO, execution has improved in Intel’s core client and data center compute markets and in next-generation manufacturing. He added that the company has several ASIC initiatives that exploit its IP portfolio and manufacturing capabilities.

“Despite near-term concerns on AI infrastructure spending sustainability, we believe increasing agentic AI workloads (CPU intensive) and a very tight supply chain for leading edge silicon should drive continued positive EPS revisions in the upcoming earnings season and through CY27,” the analyst wrote.

JPMorgan’s 2028 EPS estimates are about 15% above consensus.

The bank will continue to monitor Intel’s data center CPU roadmaps, AI compute strategy, foundry customer engagements and ASIC design-win pipeline.

“Risk/reward is more balanced at current levels and we move to a Neutral rating,” Sur said.

Original Article

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