Wall Street analysts stated that Intel’s (INTC) latest quarterly earnings and its guidance indicate that the semiconductor giant’s transformation efforts are paying off. However, they generally believe the company still has a long road ahead. Influenced by the earnings news, Intel’s stock price rose 6% in pre-market trading, with its competitors AMD (AMD) and NVIDIA (NVDA) also seeing simultaneous stock price increases.
Blayne Curtis, an analyst at Jefferies, pointed out that after adjusting for various variable factors and considering the accelerated growth in server demand and the early stages of the PC refresh cycle, Intel’s performance and guidance were slightly better than expected. He believes that while the company’s foundry business still faces challenges, the operational deployment of the 18A process is a positive signal, and he looks forward to seeing the Panther Lake series at CES. Curtis concluded that, overall, this earnings report showed solid performance, but it benefited more from the strong recovery in the end markets. Therefore, he maintains a “Neutral” rating on Intel but raised the target price from $35 to $40.
Analyst Louis Gerarde also expressed a similar view, believing that Intel’s strong performance this quarter lays a good foundation for its future development. He particularly highlighted the standout performance of the Client Computing Group, which grew approximately 5% year-over-year and remains the company’s core growth engine. The profits generated by this division provide crucial funding for Intel’s other high-growth businesses.
Joseph Moore, an analyst at Morgan Stanley, holds a more cautious view. He noted that Intel’s better-than-expected Q3 performance was partly due to management’s conservative guidance. Despite the optimistic market sentiment, Moore maintains an “Equal-weight” rating on Intel. He added that if the stock price rise is driven by enthusiasm for the foundry business or geopolitical optimism, and these positives ultimately fail to materialize in the microprocessor portfolio, the current sentiment is at risk of fading. He also stated that while potential foundry agreements with key clients in the future could be positive catalysts for the stock price, he is skeptical about whether this business can deliver positive cash flow returns.
Vivek Arya, an analyst at Bank of America, also acknowledged that Intel’s performance and guidance were strong, noting that this trend also sends a positive signal for AMD, suggesting that demand may still outstrip supply until 2026. However, he also pointed out that he does not expect a “substantial improvement” in Intel’s foundry business and that the company’s lack of an AI accelerator product is a significant disadvantage. Arya focused on valuation risks. He stated that Intel’s stock is currently richly valued, with a price-to-earnings ratio for fiscal year 2027 exceeding 50 times. This reflects speculative market expectations for Intel to “recapture CPU market share” and “achieve significant breakthroughs in the foundry business.”
